Try using the heightmap from the 'Driver' demo in the Mak folder. The following code should work fine:
That should create your basic terrain, if it doesnt I'd be suprised :P
Terrain = LoadTerrain("Heightmap.jpg") ScaleEntity Terrain, 1, 20, 1 TerrainDetail Terrain, 2000, True
That should create your basic terrain, if it doesnt I'd be suprised :P