I sometimes do somewhat similar style to these maps. The way I'd do this style is all the line work as hand-drawn with pen & ink, digitally scanned, imported to Xara Photo & Graphic Designer 9 (my preferred vector application I use for mapping), then all the water color in the finish as vector shapes with fractal color fills placed beneath the hand-drawn linework. I don't use caterpillar brushes, rather I hand-draw every line in the caterpillar work - though I am extremely fast at both drawing and finishing in digital graphics applications.