a typical way to do it is with heightmaps.
they can be downloaded from several places as DRM files if you want to use a real landscape. however they are untextured and you have to look into converting them into .bmp's
or you can generate it from software such as bundysoft's L3DT. which i'd recomend. you may need to suplement it with some textures from allgorithmic mapzone (sp?) though IIRC it didnt used to ship with the highest quality textures...
when i went to a MS seminar for xna they did show me an example of generating terrain as it was needed... like a minigame with a blimp you controlled. hav'nt heard of it since mind.
hope it helps
Dead.Rabit