Okay, so I'll try to answer everything in some sort of convoluted order
Achieving the Effect
Basically, all I did was set all the surface colors in Terragen to white, cleared the sky of all clouds, left the Terrain Casts Shadows box checked and let it go into render mode. To better define the shore line, I added a distribution mask for the shore line only and set the color to black. The short of it is, the dark areas are nothing more than the shadows created by ridges and valleys between elevation points. If I had rendered both the previous image and a colorized version of it from the same camera angle, the dark areas of the black and white version would correspond to the shading in the colorized version. Waldonrate would probably be better equipped to say whether or not the same effect could be achieved in Wilbur, but I would imagine it might be possible. It can certainly be done in FTPro to an extent by setting land and sea colors to white then playing with the Intensity settings for shading.
Camera Angle Issue
It is possible that the camera angle is an issue. It was set at an angle of about 4 degrees from top dead center which would, in fact, make areas further away from the target point appear more isometric. I didn't have time to run another render last night, but may try again today at an angle somewhere around 45 degrees off of top dead center and see what happens. Another possibility is that the area in question just doesn't have enough roughness (or variation) to create more significant shadowing.
Useful for Something
It is, however, unquestionably useful for something. I'll experiment a bit more, particularly where the mountains are concerned. Perhaps make a flat terrain, then build isolated mountains, erode them and then render from a distance that will allow me to cut them out and use them as tubes/brushes/tiles for my older version of PSP. One of the things I've always thought Terragen might be extremely useful for is creating textures, particularly since I can render them at fairly large sized and avoid tiling issues over in PSP or GIMP. Rather than having several rows/columns of "grass" or "forest" tiles, I can render them as one large tile and then mask it out as a single layer.
In the meantime, it's back to work on the map, and I'll continue this little experiment as a side project of sorts as I have time. Thanks for the feedback though, it was/is definitely helpful.
GW