The only thing about Tom Patterson's tutorial on importing 16 bit PGM's into Bryce 5 was that I could not duplicate it myself with a TEST GRAYSCALE. This is by no means Scientific Proof of anything...

What I did was make a grayscale ramp as seen behind the samples of the Bryce, Vue and Terragen renders. I made the ramp using Chipp Walter's OTHER tutorial in which he has an exact formula for getting rid of STEPS using Gaussian Blur.
(If you don't follow his formula- you will ruin the ramp.
Still- I won't call MINE "Perfect" either.)

But what you can see is that an imported 16 Bit PGM looks like the fur of a Wooly Mammoth in Bryce and a pile of Lumber when I imported a 16 bit TIF into Vue's Terrain Editor. Only Terragen seems to think this was a smooth RAMP and rendered the imported TER (a 16 bit file native format)
with a smooth slope. I used TerraConvert to make these test files.

Of course you WILL see steps in the attached picture NOW because I have converted it to 8 bits and JPG'ed it!
But-what happened to the 16 bit PGM? Is Bryce REALLY importing it at 16 bits? Hummm...