From memory, since I don't have Bryce here: Terrain editor -> Picture tab -> click on the triangle in the upper right corner, Define plug-in directory, choose the Photoshop plug-in dir. BUT: you can use just third-party plug-ins, not the ones that come with Photoshop. IE, you can use KPT, EyeCandy, Andromeda etc. A great help with stuff like waves and terrains.

-- erlik