You need the 6.4 public beta update for this. With 6.31, you'll need to have at least 4.7 GB of memory just to handle it because of a design flaw in MED. This flaw (originally reported by me when the 6.40.0 update was finally available) has been fixed in the latest MED (since at least 6.40.2). Another possible cause is that the terrain is using more than 65,535 vertices, the limit of DirectX and MED isn't designed to cope with this. The highest possible is 500x500 vertices which needs slightly over triple that limit.

The absolute largest you can make a terrain is 257x255 vertices (or 256x254 tiles as I often think of it as).