Thanks for your help. What I ended up doing was rebuilding the terrain with a big flat part in the middle and then repositioning all the buildings. Thanks for your help.
If you want to see the finished deal go here:
http://www.freewebs.com/therpgproject/apps/photos/photo.jsp?photoID=3833533It's not much, but I'm just creating something to start designing a RPG with. I have another question now about using terrain objects but I think I'll just create another thread for that. Thanks again for your help.