It is not a question of height resolution (8/16 bits). Vue uses the true shape of the heightfield if it is handling a procedural terrain while it DELIBERATELY smoothes the normal terrains.

As an experiment, create a terrain with a terrain generator striving for finely detailed structures and save the result as a 16 bit TIFF. Then create, using the same TIFF, two terrains, a normal one and a procedural one, put them side by side and render. You will see that the procedural terrain maintains the fine structures while the nornal one has been smoothed out.

This is purely academical if you cover your terrain with ecosystems or have textures which kill fine details; otherwise, e.g. for desertic scenes with "bland textures" the difference is absolutely striking.

I don't know whether I will have time today to do so, but I plan to create a side-by-side comparison image to be posted in the gallery to nail this bug with a visual proof this bug.

GIMP 2.7.4, Inkscape 0.48, Genetica 3.6 Basic, FilterForge 3 Professional, Blender 2.61, SketchUp 8, PoserPro 2012, Vue 10 Infinite, World Machine 2.3, GeoControl 2