Yes, it does kinda see black as invisible. If you clip it. Open the clipping bracket and click-drag on the bottom of the clipping bracket. That's the hard part, which I think all of us passed through, dragging the middle of the bracket which does nothing. :-) The clipping bracket is to the left of the black triangle where you define the preview size. For booleaning, on the same menu where you determine the preview size, there's an entry which says "solid". check it. And when you exit the TE, follow the usual steps for booleaning - positive, negative, grouping ... Watch out for the thickness of the terrain (Y dimension). It wouldn't do if it was too thick.

-- erlik