Anyway Kruzr, here is the same picture above with a function and a filter applied to the function.. You can see that it starts to look like your terrain... So, when in the terrain editor, go to the upper right hand side, there's a mountain icon with a plus and a question mark, click on it... There will probably be a function there adn a filter.. Double click on the filter and set it to any one of the constant ones and try resetting the terrain and re-importing the picture... It should come up looking regular... Let me know if that's the problem...