The only "issue" is that it needs to be aligned to the ground. So you will need many different meshes to cover everything. But for terrain if you´ve got a heightmap you could get away with just one mesh by doing the alignment in the vertex shader of the grass sampling the heightmap.
I've tried exactly this some years ago and remembered it now because of your comment. I did not get this to work back then because the vertex shader would not except tex2D commands, the trick is to use tex2Dlod (supported from VS3.0 and above) instead. Works fine and is amazingly fast:
"Falls das Resultat nicht einfach nur dermassen gut aussieht, sollten Sie nochmal von vorn anfangen..." - Manual
