Here are the 2 images I used (scaled down from 2048 each) to create the 2 main terrains you see in the image I mentioned above.
What I'm thinking of doing is simply "smoothing" out the steps. While it sounds simple, what I think I'm going to end up hainng to do is create a gradient for EACH STEP to go from one to the next, then even do a smoothing once I get it into Vue since I'll get jeggies and "steps" from one grey value chance. It's not as smooth as you might think, but it can work I guess.
BTW, I tried an image with the procedure descibed above, so I'll post that next.
-Lew ;-)