in MED the terrain conversion is very limited, you need exactly the same vertex structure as a terrain has (create one and you will see what I mean).

a possible solution is to convert it to a heightmap bitmap, then create a terrain from that bitmap in MED. you need a little script to c-trace the model surface e.g. in 512x512 positions and store the height values between 0..255, and store the min and max height values too, to enable exact reproduction afterwards.

alternatively, you can do c-traces only in the desired future vertex positions, store it in a custom text file, create a terrain in MED with similar vertex resolution and size, then load the file and deform terrain, it is fast. you can save it also as .hmp, just check the source of my editor, I use this solution.

but for correct texturing you need to have your model simple top down uv unwrapping, or it will be stretched. but in case of a large terrain multitexturing is more recommended than a single skin.