My guess is whole terrain mesh will be LOD-based, created in Max, then perhaps cut into square chunks with their levels of detail
I suspect all ground objects will be added via standard ini placement, hard to guess about land features like trees, rivervalleys etc
Here's some test work I did some months back with building simple circa 20x20 km landmass in Max, in my test covered with single odd 5120x5120 texture with skylight and (broken) shadows, then (after failing hehehe) used other way to generate standard HDF from it, use Image Cut app to cut the texture to 100 individual tiles (10x10 rows) but I stopped testing
continuing I guess that new terrain data is based on STRM rather than DEM for more accuracy, which was proven by my comparision of GE and ingame shot. Whenever mesh uses single mega texture or more individual ones, or tiles remains yet unknown (I think the split megatexture)