Ace I believe the frostbite engine does that to create craters in the ground but there may be a problem unless you use something that has some form of tessellation capability but one cool thing about voxels they are getting to look extremely good (in other words not very blocky) take euclideons engine for example or Atomontage. Unfortunatly there is nothing this good that is open source. but the good thing is it is possible.
I thought Euclideon was labeled pie-in-the-sky long ago? I’ve seen it show up a couple of times in here over the last 5 years or so, and it always ends up being explained by someone that their demo is not indicative of a viable product, because their method only lends itself to static 3D? I don’t know any of the technicals, honestly, but I do recognize the images. Atomontage I never heard of before, though! And if they can live up to their claims… wow! those images are nice 
But apart from the whole point of the thread (it seems a dud, there seems to be no engines out there dealing with this stuff in a non-block manner), I am having trouble understanding why people say it’s so difficult to achieve without blocks or voxels? The math is relatively straight forward, and if I had any serious programming talents I might be well on my way already. There seems to be an idea floating about that (and please correct me if I’m wrong, which I likely am) non-voxel geometry is somehow static in detail. It really takes nothing to swap out detail in relation to proximity, and I thought that was what everybody did? My first terrain test had a pretty simple (though by NO means elegant) way of breaking polys up when they were manhandled (e.g. when digging through), making a single, flat poly become relatively detailed holes in the ground as needed. Am I completely missing something? (or, more precisely, what am I missing, because I am very clearly missing something 
)
If you don’t want to use voxels at all, then you would need to find a way to do the same advanced algorithms as seen in software like Vue and Terragen at 60 FPS.
Now onto your initial example, maybe if you took a low resolution mesh like that and used that as a reference cage for the high quality terrain generation, it’d be similar to the idea I posted before, but using a mesh as the reference for detail and displacement generation instead of a voxel map.
Although risking my head might burst from trying to understand this, I will dare ask: Can you explain that to me in other terms?
It should also be noted that most of these things I am actually planning to do for my own game engine. I am actually really just looking for ways to reduce my workload, so any tips on “simple” methods for achieving the same are, of course, always welcome. If I can get things running without major investments, it will be made open source, just like what I am looking for myself. If that made any sense, I am rather sleepy at the moment 