Hexi, ECW is a killer compression and it's used in Geographical Information System software, and they use monster terrains. You really would be cutting edge if you implemented that

Another compression format is the hf2/hfz which was hashed out between a number of terrain editor software developers, including: L3DT, World Machine, Wilbur, Leveller, GeoControl. Aaron Torpy of L3DT implemented it:
http://www.bundysoft.com/docs/doku.php?id=LibHFZ
Global Mapper, a GIS software supports ECW compression and hf2/z.
Don't know if that would be of any use to you or not.
Our terrain consists of a heightmap with accompanying GIS database.
monks