Here is an odd scene…
I like it but there are many things in it that dont quite look right… what do you think?
The tree near the mug was supposed to be ridden of… i must have missed it…
The displacement on the ground is really… blocky… anyone know how to fix that?
http://www.putfile.com/pic.php?img=5404674
My only real critism is that the tree looks really out of place in the rocky terrain. My advice, either put a texture on the ground that makes it look more organic or remove the tree entirely. But that’s just my opinion 
There should be a slider in the Texture window where you select what to map it to (Displacement - Disp) that will let you set how much it will effect the displacement. If you’re using nodes I’m not sure if that will help or not, i haven’t gotten into that much yet.
Neat idea.
You need to increase the number of faces of the ground. Add a subsurf modifier below the displacement one.
One thing I would look at is you have a strong light from the right, but the tree seems to be flatly shaded. Also it’s far darker than any other part of the scene, which makes it stand out. Not sure if you were going for this effect or not though.
Ian