There's an example/tutorial on the acknex resource site.

Otherwise you can use any paint program to create a eg:512x512
using different shades of grey as your heightmap.
black is lowest up to white is highest. Save as a bmp or tga
then import into MED as a terrain heightmap. Second from the bottom
of file/import i think it is. If you want to create grass/etc
You need three texture files Green = grass, blue = rock and red for sand or paths. Then using a paint program again and your original
heightmap start drawing and painting. Or do a search on the web for
EarthSculpture v0.25, It's old, not many functions but it works. Oh yeah and it's free. It automatically exports heightmap, blendmap and detail map. Download mystmoods freebie it has a manual with a bit of an example of how to use EarthSculpture.

Good luck