I'm new to Houdini and Terrains but there have been some great tutorials under ‘Learn’. One was posted on there some days back called ‘Create Terrains From Elevation Maps In Houdini’. I watched it once, and it was really interesting but it's no longer up there, and the link does not work any more:
Many thanks!! I found it again. I worked through as it worked like a charm.
@rgbxyz - I didn't see anything until the final step where there was a calculation to set the displacement distance, but it does all work. Did you try picking a region with very obvious terrain changes - eg mountain range?