If you want to keep almost as much control over your terrain as painting would give you, but you want a more compact representation, spline surface patches are a good choice. You can use any surface patch representation you want; bilinear and bicubic both work fairly well, with bicubic being smoother at the cost of additional computation.
Based on available evidence, SimCity from Maxis uses splines to represent terrain. An initial surface would be selected based upon whether your site was on a river or a coastline, then the surface would be divided into smaller patches and some randomness added. The final step for tile-based display is evaluation and quantization at each grid point.
Right now, I don't have any more detailed information for you.
Up to the terrain synthesis page
© 1996 cburke@mitre.org