Ok, I've decided to go with terrain based levels. To make them, I use MED to create a terrain 128x128 vertices in size, with each polygon sized at 64x64. The standard trooper unit is considered 128x128x128, meaning each polygon is half the size of a trooper.

To keep my terrain simple, I'm making heavy use of the min/max options of the magnet tool.

For fine tweaking though, such as adding perfectly smooth slopes, I would like to be able to do use an image editor. However, MED cannot export HMP files as bitmaps (although it can import them), so I'm stuck there. Does anyone know of a plugin that can export HMP files as BMP files?

EDIT: For the multitexturing shader to work, it seems that I also need the heightmap in an image file (for blending purposes). So I'm doubly screwed if no one can help me. :\