Your first idea is exactly what Autodesk's Mudbox does. I can't speak for the games industry but it's a reasonably successful product in the VFX industry. See h

Your first idea is exactly what Autodesk's Mudbox does. I can't speak for the games industry but it's a reasonably successful product in the VFX industry. See http://usa.autodesk.com/adsk/servlet/pc/index?id=13565063&siteID=123112 http://usa.autodesk.com/adsk/servlet/pc/index?id=13565063&#3... for more details. The second idea is also already being done by software like Terragen from Planetside Software: http://www.planetside.co.uk/ http://www.planetside.co.uk/ I don't know how widely used this is; I have the impression lots of game companies build similar tools in-house, tailored to their particular games.