There is no spoon
Legacy:Making Terrain (UT)
Ways to Make Terrain
Vertex Editing the terrain brush shape. Do this by placing the side with all of the vertices facing upward and using editing to lower and raise land where desired.
You will need a floor lofter thats all I know. Ued 1 has a floor lofter in it and it works so you could import and export the brushes.
This involves using tessellated cubes to make the terrain in your map-it is like using the terrain brush but you can modify the brush sizes and stuff as you go so it is more configurable
3rd Party Apps
TerraEdit works quite a bit like the editor's Terrain Brush, in that you can manually raise and lower the terrain vertices. The real benefit is that you can use BMP heightmaps to automatically generated terrain. It also has a nice smoothing tool that can add a bit of realism.
Using 3D Studio Max
Making terrain in 3D Studio Max is simple. To do so, create the desired size of your terrain using a box primitive (with a good amount of segments), then convert it to an editable mesh. Next, apply a Displace modifier to the mesh. With the displace modifier, you can apply what is called a "height map" (a greyscale image that actually transform the surface. Grey is flat, black to white are the varying degrees of height) on the surface. You could "paint" an actual path in your favorite image editor and apply it to a surface. Once you are pleased with your results, collapse the mesh, then export to a .dxf file to be imported into UnrealED.
Using Nem's Mega 3D Terrain Generator
slightly similar to TerraEdit, by the way you can move things up and down, but is much more powerful and has more tools. heck, i (Icedude) used it to make a realistic terrain, and i suck at mapping!
Get 2.3.0, includes dxf support.
Save as dxf, then import it as a brush.
Ike Bart: When I tried importing a brush I made in Nem's 3D Terrain Generator version 2.3.0, All I got was a big sheet that looks like my terrain. I exported that terrain file to a heightmap in BMP format and then imported it into TerraEdit after converting it to 8-bit greyscale exported it again to .t3d format using TerraEdit and there is my terrain brush, nice and solid.
Icedude: If you add it in a cube the same size as the terrain, it is solid anyway, so you dont need to export it again
Easy process or high performance?
The hard way
The easiest way of making terrain for us without 3DS Max is to use Nem's program. The "problem" with it is that it generates many unnecessary polygons, such as in flat areas. To reduce the polycount, and thus improve performance, demands that you need to do your terrain in UED. Of course this might be a bloody headache, but the performance of your map increases and you can add your polygons somewhere else, in example add more trees, make a better bridge over the creek you made and other cute stuff.
Just something for us UT mappers to consider before the mods move to UT2003 :)