Not sure if this is of any use BUT, depends on if you want your terrain to be absolutly accurate but what have done, is to convert the dem into a grey scale ( which is basically is anyway) and then made a nurbs plane, cranked up the resoulution up and using artisan, reduce your brush size, place it on the Y axis, crank up the maximum displacement, (to approx the maximum hight of your terrain) and import your greyscale DEM as an attribute map from the map tab, you may need to reload it a couple of times to get the right altitude or else if u need it to be exact create a mel script to define the parameters but I never needed it for GIS puposes so absolute accuracy was never a huge issue 
thats how I have doen it anyways
Slain
