You already had an existing terrain in there? When you launch it, it opens with say avawinter? Or is opening with no terrain selected at all initially?
I wonder if the initialization somehow got thrown off. Try saving the terrain as a new name. Then shut down the TE and then re-open it.
Or do you have multiple version of the TE on your system? I have most versions dating back quite a bit. Every now and then I end up opening an older one, not realizing it, and then try to open up a newer terrain and things go wonky along the lines you describe.