This is meant as a guide for a beginner who wants to make some really good looking terrain, but doesnt want to spend an arm and a leg.  I`ve bought all the tools and accessories you can have, from a Pro quality hot wire cutter to a fancy battery powered static grass applicator, so I think I can help steer you in the right direction.

My first advice is to ditch the hot wire cutter, and buy and exacto knife and a really thin saw. my favorite saw looks like a heavy duty carving knife with a deeply serrated edge.  I can`t say enough how much easier life is with those two. I use the hot wire cutter now and then for specific purposes, but the fumes are horrible, and its slow compared to good old fashioned carving. Heres a list of what you`ll need and how I think you should get it, most affordably:

Insulating foam sheets- The pink or blue kind are excellent, get them in sheets at a hardware store $20 buys you a 4`by 8`1.5 inch sheet I believe
Latex house paint- Get the colour you want the ground of your hill to be, if you dug down a couple inches. I usually go with a shade of brown.  This is an item you can get dirt cheap or free. Go to the local paint recycling place and ask if you can have some of theirs. I did, and now have a ton of colors, all free. I also go to the local paint store and buy returned off tint cans, at a fraction of the price. Every bit you can save adds up, when you are making terrain for a class of 30 kids.

Cat litter and sand- pick up the sand when you buy your foam. Use kids playground sand $5 for a bag bigger than you`ll need for the rest of your life. Cat litter from the grocery store, also more than you`ll ever need, unless you actually have a cat.

Vermiculite, pollyfilla and latex caulking- these are optional extras, used to add texturing to your work. Buy them all at the handy hardware store. Vermiculite is a soil additive from the garden section. Its like super light cat litter.

Weldbond glue- Hardware store must have. Great white glue, strong, cheap and pretty quick to set.

Ground cover flocking- I use 2 types, static grass and fine ground foam, both from Scenic Express. Buy from model railroad places rather than 40k stores, your wallet will thank you, as will local retailers.

So much for materials, now comes the easy part.

1-Take your foam and carve it into a rough shape that you want your hill to be. Kidney shape, oval, whatever.

2-I like to use 1.5 inch foam, so I then cut away ledges and details into the block I just cut. I glue some of the cuttoff pieces onto the hill for variation.Alternately, you could pancake layers on top of one another, if you want to build a bigger hill. This works great, but dont get into the trap of just using 45 degree cuts for the whole hillside. Its functional enough, but the appearance is pretty plain next to one you`ve spent a couple extra minutes carving. The terrain will be with you for a while, dont cut corners now.

3- glue what needs to be glued and let it dry

4-cover it all in paint. easy enough, but move onto the next step before the paint dries.

5-add ground texture (optional) If you bought the vermiculite, plaster and caulking, mix up a `goop`of all three with some of your paint and water. make the mix look like really thick toothpaste and you`ll be good to go. Spread it around on your hill, spareingly until you get the feel of how it looks. It will smooth out you hill cuts and add subtle rolling effects to the ground, so its well worth the effort.

6-more ground texture. Sprinkle by hand a mix of sand and cat litter here and there, especially at the base of any steep areas of you terrain, to look like loose rockfall.
Add it pretty thick if you dont want the grass to stick over it. its up to you.

7-grass it up. Again by hand, add the ground foam and static grass. Basically just throw it on. nature is random, you might as well be too.

8-wait for it to dry, turn it upside down, shake off loose material onto some newspaer and save for your next project.

Thats it. Start with a small hill to try the techniques, or you`ll be like me and look at your first one and go `what was I thinking...`
One of  the areas which can set a scene apart is the detailing of its pieces.
While the versatility of a straightforward "grey building" paint job has its merits, such as quick mix and match into any setting, a custom designed terrain board really comes alive if you take the time to make the elements work together.
Wargaming groups can be a terrific source of information for modeling and terrain building, and I encourage anybody to join some.
One of the groups I belong to "Flames of War Pacific" had a couple of great ideas posted that I wanted to share here with others.
The first is from Royston Boss, passing along some tips from his friend Rodg:
1)  Buildings are part of the terrain in which they sit. It colours them.
2)  Rain runs down from roofs, window sills and doo lintels, and causes streaks on the buildings from the top down. Such things as iron gutters and corrugated roofs cause rust streaks.
3) Rain hits the ground and bounces up causing some ground colour to go up the side of the building.
4) Mould grows where the building meets the ground and where it runs from gutters . Mould is black/grey green.
5) High traffic areas such as dooways develop their own pattern of wear like around handles. A gun slit wears where the gun rubs against it (if it does).
6) There is generally mould an lichen growt  around the base of chimney pots or aerials on a roof and mould etc grows mostly on the Northern side of a building in the Northern hemisphere.
7) In tropical climes plants grow around an on buildings very quickly  and will soon obscure the join to the surrounding terrain. In temperate climes it takes longer, but a bunker built for more than a year will definitely have growth around it unless some drill sergeant is having it  bulled an blancioed frequently.

Added to this isa post by Mal Wright:
The most important thing everyone can do, is to observe nature around you. Take note of the colour of trees and undergrowth. Even if you live in a city there will be parks and gardens. Observe the way trees look. They are rarely a ball of leaves on the end of a stick trunk! Also note the way shadow effects the area underneath. You can make them look better by adding dark colour beneath bushes and trees. The floor area of woods should be much darker than surrounding areas.

Take note of how weathering effects buildings. Look at some being demolished and note that gravity rules. Rubble falls downward and collects where it fell. Damaged bits hang down according to the support remaining, and the gravity effecting their weight. This is an important instance where gravity has a counter to its pull.   Look at how real roads sit on the terrain they pass through. There are always drains and sometimes these can be substantial. Model roads sitting on a table top terrain often look wrong because they don't take drainage into account. Drainage causes the growth along the edge of roads to be thicker and darker in colour. Even if now dry, moisture that gathered at some other time will have drained off and effected the edge of the road.   If it is a dirt road the moisture will have tended to gather in wheel ruts and hollows. These will be darker as a result.

A touch of dark brown can make them look good. A touch of dirty greenish brown water looks good applied in wheel ruts, but don't forget to apply a dash of gloss varnish to the the water surface. It will make them stand out and look much better. The deepest part of a rut will be much darker than the top edges of the rut where it has been drying out.
   Human intervention establishes what some areas will look like, depending on the nationality. For example you can give scenery a nice touch by looking on the www and locating old advertising posters. There are lots available. Reduce the size and print them out. When attached to the side of buildings they can add a feel of a particular location. French for France, Chinese for China etc etc. A rather bland model building can be made to look great with some period advertising signs. Propaganda posters reduced and printed out to attach, can give an excellent feeling of an era. When reducing, keep the posters small enough to look OK, but remember the visual effect is enhanced by keeping them large enough for them to be read and recognised for what they are.   Even a flat desert terrain can have notices at cross roads, so for the right look on a western desert terrain add a couple of army directional and HQ signs in the appropriate language. This is a small touch and one so easy to do, yet it adds an amount of flavour well worth your efforts.   A  civilian vehicle or two, a wreck, some debris, can also give a nice touch to your scenery. They don't have to be just objective markers! The use of these odds and ends can really lift the appearance of your scenery. An occasional civilian figure helps too.  

 Dirt. Don't waste your time trying to model dirt, if you can simply get some finely sifted real dirt and use that! I use real dirt on the base of my troops but also on my scenery. Its cheap and its real. I've seen some people go to amazing lengths to model dirt that is never as effective or inexpensive as the real stuff.  

There you go, back to me again...
Some great advice and tips there for all of you interested in building your own top level terrain.  It takes a lot of work at first to get the hang of it all, but its worth the effort in the end.
I really like the idea of the miniature posters. Whenever I see them on buildings, it gives the impression that they really are "miniature buildings" as opposed to lumps of plastic and plaster dumped on a board to block line of sight.

One of the wonderful things about creating terrain is that it gives freedom to create one's vision, in the same way that an artist uses a canvas. Unforetunately, the hobby is often marginalized as only belonging on game tables.
while this is certainly a great place for it, I've found that it works wonders in the classroom as well.
Over the last several years, i've been building thousands of Hirst Art molds for use in Elementary school classes, and have had outstanding success with them. Kids love to get their hands on them, and spend hours gluing them together and creating environments for them to exist in.
Bruce Hirst has an excellent series of ancient Egyptian molds, as well as Gothic stone, Fieldstone, and some Roman themed columns. This variety allows students to work in a variety of eras throughout history, in many different cultures.
For math curriculum, the use of shapes is covered, as the molded bricks are a variety of cubes, rectangular prisms, cones and so on. The art aspect is obvious, and it takes very little effort to work in a social sciences unit around the buildings as well.
When the buildings are done, the kids can put together living environments for their castles, again using basic terrain building techniques that add so much visual appeal to the settings.  Again, the kids can be challenged to represent resources found in the areas around their historical setting.
The only drawback is the time it takwes to make all the bricks. I'm fortunate to have a job that allows me to take the time when i can, which i am very grateful for. For anybody else it may be a challenge though.  Anyway, you can always buy my stuff... :)

As I do a lot of building in schools as part of social studies curriculum, I've had to be creative as how to keep costs from going through the roof. Teachers dont make enough money.
One of the best things I've learned is that one man's waste is another man's treasure. Specifically when that waste is terrain building materials.
Latex house paint is great for painting buildings, hills and groundwork, but at 30 dollars a gollon, not really that cheap. Not when you want several colours anyway. Possibly not a problem for individual builders, but when 30 kids are making a board, you need the paint.
Solution: Mistinted paint in your local paint store. People buy the paint, find it doesnt look quite right, then return it. paint store sells it off at 1/4 to 1/3 the original price. Big boards just got a lot more affordable.
Another great source of material is the local recycling center. You may have to ask permission to go and grab stuff, in fact that proably a very good idea if its any bigger than a local curbside depot.
once you get the ok, go to town. Styrofoam is going straight to the landfill from there, unless you liberate it, carve it up, and paint it with your already obtained cheap latex paint.
Another nice feature is that packaging styrofoam is often cast into circular and dome shapes, which gives you some nice chances to be creative with your buildings.

There probably is no perfect glue for every application. I have used many different types over the years, from white school glue to super epoxy resins.
For most uses I prefer Weldbond brand white glue, which I buy at my local Rona hardware store. I'm sure any hardware store has it. It comes in small sizes all the way up to big gallon jugs, which I buy.
it has several good qualities that make it a preferable glue for hobby uses, in my opinion.
1) dries clear  - a big factor when you add glue after painting for whatever reason. some glues I've used dry noticeably yellow, and dont look that good.
2)dries fast  - but not too fast... I find I have more than enough time to move things around to get a perfect fit before I need to worry about clamping or otherwise locking the pieces into place.
3)water soluable  - you can mix this glue with other water soluble products like latex paint or plaster, or both at the same time, to make a super strong pigmented, spreadable substance.
As a terrain builder, I enjoy a varity of different aspects of the hobby. From an artistic point of view, its fun to create something out of an idea and have it used by people all over the world. As a gamer, I get to put terrain on peoples tables that I want to use myself. Its a win-win scenario.
Its always tough to decide what type of work to do though, as there isnt always a complete transfer for game systems. Warhammer 40K, being a 28mm scale game, created buildings that dwarf Flames of war 15mm minis.
On the positive side, tree stands and hills work pretty well for both.
Stylistically there is a difference as well. I try to be historically based for my Flames of war buildings, but put more of a "future" feel to the 40k items.
There's a lot of crossover in there, but the scale is the big divider.
For those who dont know...
28mm refers to the fact that 6 feet in game size is represented by 28mm on the game table. The same is true of the 15mm versions.

I`ve found that, with the large amount of hydrostone plaster buildings I`ve built over the years, painting them can be a bit laborious. True, you can look at it as a labor of love, bringing out every detail of a carefully built piece. Or you can look at it as one more step before the building gets on your table where it belongs.
After hourse of casting and more hours gluing, I was looking for a way to both make my buildings look good, while still avoiding the painstaking process of brushing 3 layers of color over every building I made. Which is a lot.
What I came up with was to use Woodland Scenic landscaping colors in a diluted form.
It made sense really, as Woodland Scenic has built a commecial empire on realistic depiction of outdoor terrain. Who better to look for materials to colour rock with...
With that in mind, I made a big mix of color, stone grey is good for a Northern look, mixed at about a 1 to 10 ratio, but I`m not exact.
Then I just dip the completed slab in, and pull it out.
For shadowing effect, I use a wash of water with a bit of black paint (craft acrylic works fine) and a bit of Future floor polish. The Future creates a good wash and adds a protective layer to the model.
I`m going to play around with different stone colors on top of the grey, applied with a sponge for variation, but I havent done that yet.
I`ll let you know how that turns out.

For me, I got started with building terrain in a trial by fire. 8000 HirstArt bricks for a class of Grade 5 kids. I`d only planned on doing 2000 (still an awful lot) but they proved so popular that every kid in the class wanted one.
Since everyone now had a nice castle, they needed some nice scenery to with it...
So here I am 3 years later with a lot of terrain under my belt.
A few things I`ve found.
1) bricks are slow to build and make.
I lent out my Hirst molds to a friend for his kids and now we dont talk. I dont think he had any idea of the time it takes to make the bricks, let alone glue them together. They are super versatile and fun to build with, just dont expect to build the Great Wall of China in a weekend.
2) terrain building is the ultimate recycling.
Well, maybe not the ultimate, but styrofoam tends to last an awful long time in a landfill if it gets there. But it can last just as long on your tabletop if you carve it into a nifty piece of terrain. The same goes for old pieces of electronics and plumbing. But dont just take my word for it. That advice comes straight from the guys at games Workshop.
3) reality isnt flat
Surprisingly enough, that one took me a while to figure out, as I kept making terrain that just didnt look quite right. I had my grass flock and my foam bushes, but the scenery was flat and boring.  Thats where textures come in.
To get the best look for your terrain, use a variety of different textures and colours on the ground floor. Be random, but with a plan, like nature is. The only drawback to this is that it costs a lot to get set up with all the materials you need. Because these, unlike foamboard, dont get recycled.