There are several ways people get the land shapes they want.
1) Draw your map freehand in a 1024x1024 grayscale bitmap. Black (0 grayscale) = water, White(255 grayscale) = highest elevation, everything in between (1 to 254) is a step in elevation. Then use the import menu selection in the TE.
2) Use Mapmaker. This program creates the proper .elv and .typ files from USGS satellite topographic maps.
3) Use Terragen and import the terragen file with MachNix's Tile Setter.
There are probably others, but that should get you started.