Is there any way to give realistic textures to terrains similar to having subsurfaces in terragen or even more realistic ? It could also be that i may have to use some plugins in blender. The problem with ter2blend is that it clips images greater than 255x255 right? Please let me know. I really appreciate it.
If you only want the image from Terragen to use as a texture in Blender then place your camera looking down onto the scene in terragen, render, save (as .bmp is the only option I think) and use that image in Blender.
If you want the whole Terragen scene you will need ter2blend. Ripsting has a good tut on one of his sites.