After browsing around for awhile, this website and google, I came across ONE program that can load a heightmap and create a 3d map from it. This program did not allow exporting to any XNA compatable formats, so I was wondering if anyone has a link to a program or tool that creates a 3d terrain from a heightmap (texturemap requirements are fine too) that can export into a XNA compatable format.

You can use TerraGen. The personal edition is free for non-commericals. It's limited a bit, but it generates heightmaps that you can use, if you download the FEO plug-in.  I wrote a little article about using it with XNA here.

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Jim Welch

It's probably better to just load the heightmap directly, and generate the 3D mesh at runtime. At least it's a lot more compact!

http://forums.xna.com/thread/55485.aspx talks a lot about different ways of doing heightmap based terrain in XNA.

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Jon Watte, Direct3D MVP
kW X-port 3ds Max .X exporter
14 days after getting my RROD box back, it's going back for service again. Grr.