Terragen is a very interesting program. I found it surfing, and being interested in webgraphics, I downloaded, installed, and have spent considerable time working with it.
The sceneries generated in Terragen are incredibly realistic! I'm not sure that if you generated a picture, in Terragen, of a particular place, and put it side by side with a photograph of the same place, you could tell the two apart. Once you create a scenery in Terragen, you can save the image as a.bmp file, which you can take into most image editors and add other features, like buildings, trees, boats, lighthouses, etc., then re-save as a.jpg.
There are a couple of downsides to Terragen. First of all, other than a downloadable manual and their website, there's no support available for the free version. Basically, that means that unless you're gifted at teaching yourself graphics software, or dedicated enough to keep at it until you get it right, you might want to pass this one by. Realistically, however, you can't expect unlimited support for a free program.
If you love making graphics, including beautiful sceneries, Terragen is amazing; I highly recommend you give it a try!
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