This is my first tutorial so please bear with me.
Ok, first we will open Blender or create a new scene if it’s already open (Ctrl X). Now we can delete(x) the default cube and add a plane (Space-> Add->Mesh->Plane) in top view (Numpad 7). Press Tab to get out of Edit mode for now and scale (S key) the plane up by 75 (you can type 75 if you like). Now enter Edit mode again (Tab) and subdivide the plane twice (press Subdivide on the Mesh Tools tab or W key->subdivide). Now in the Mesh Tools tab, we will press Fractal and press OK to accept the pop-up that says “Rand fac: 10”. Now we will Press W key->Subdivide Smooth and accept the pop-up of 1.0000. Tab out of Edit mode and press Set Smooth in the bottom of the Link and Materials tab. This is a nice start for our terrain.
Tab back into Edit mode and select a vertex (any one) with the right mouse button. Press the O key to turn on the proportional editing tool. In the 3d View header, You’ll see a orange donut with a dome-like thing next to it. Press the dome and select Root Falloff. Press the 1 on your numpad to get into Front view. Now press the G key to grab and move and use your scroll on you mouse or the - and + key on your numpad. Now move your mouse around and watch the vertices move around. Once you have a nice hill, press left mouse button to save that transformation. You can play with other falloffs if you like, but for now we’ll change the falloff to “constant, no falloff” and select another vertex (you can rotate the view with the middle mouse button to select a new vertex, but go back to front view) and make a nice plateau. Last but not least we will select random falloff to create a rock structure of sorts. You can now Tab out of edit mode