no Commercial needed for the terraintex.fx which is a fixed function effect. it utilizes alpha blending of in theory unlimited textures, but textures can't be painted in MED. you can export .hmp in this format by a free terrain editor called PnP Terrain Editor. my editor also includes support for this, and features terrain deformation and texture painting (but currently can't save modified textures into .hmp, only as separate files, but it's only a few clicks in MED afterwards, or can be loaded runtime easily). if you need realistic terrains, in my opinion the best to use L3DT.

as I remember GED offers terrain editing utilities including deformation and taxture painting, but number of textures limited. but I've always got a crash when used GED...