So I found a heightmap of the Falkland Islands in PNG on the web. I wanted something to act as a test terrain for berms and land objects. In the process, I managed to line up all of the scalings perfectly (lots of trial and error), so I figured I should document the method here for anyone else who tries it this way.
1. Find a heightmap (or generate one) of a real piece of terrain. I was lucky and quickly found a rectangular, grayscale, heightmap in JPEG of the Falklands. But you could use anything. Artik's program works well, but it doesn't let you tweak things in L3DT before it goes into the TE, which can be very useful when it comes to setting heights of mountain ranges.
2. Using Paint, I squared off the rectangular JPEG. The square turned out to be about 1470x1470 pixels. I saved this as a BMP.
3. Knowing from google Earth that the Falklands are about 260 miles across, I cropped the BMP to the 260 mile mark, using Paint. Now I was down to about 1300x1300 pixels.
4. Since the scaling you need in the import from L3DT to the TE is 660 "meters" per pixel (even though it ends up in feet in the TE), a 512-mile "final product" square needs to be 4096x4096 pixels. So, using Paint.net, I made a 4096x4096 black image file. This would serve as my full map. All I had to do was copy the file created in the steps above (properly scaled) into this one.
5. Since my heightmap BMP of the Falklands needed to end up being 260 miles across within the "final product" 512-mile (4096x4096) square, I resized the 1300x1300 pixel image (which was 260x260 miles) to be 260x4096/512 = 2080 pixels square. I saved this, and pasted it into a layer on top of my 4096x4096 black square, and then saved the resulting image as a BMP.
6. Now, an important step. For some reason when you import a heightfield from L3DT into the TE, it flips on you. It's as if your heightfield was a dinner plate, and someone grabbed the rim at 6:00, and flipped it over towards 12:00. So to outwit the software, I flipped it vertically myself in Paint.net, as a pre-emptive move.
7. I then opened L3DT, and started a new project as a Blank Designable Map. Width and Height were set to 4096 pixels. Horizontal scale was 660 "meters" per pixel (again, that ends up being feet in the TE). HM/DF was left as 64, and I left all of parameter sliders in their defaults. The last 'wizard' step was the calculation queue, where I only left Design Map checked. The wizard then generated a generic terrain, which was soon to be overridden.
8. I selected File / Import / Heightfield, and selected the flipped 4096x4096 bitmap I had created in step 6 above. My file format was bitmap, my horizontal scale was 660. I specified minimum alt to be -135, and max alt to be 2000. Again, these end up being feet in the TE.
9. Now I had my flipped over heightfield in L3DT. I checked it out in Tools/Heightfield Editor 3D, and it looked good. I could have played around with it more, but I left it as is.
10. I then selected File / Export / Export Active Map Layer, and got the export wizard. Format was set to RAW, Options set to 16-bit signed manual scale, InvertY set to true. I clicked OK, and I now had a signed heightmap ready for the TE.
11. I opened the TE and started a new project. I set the map size to 512 miles. I selected File / Import Signed Heightmap, and found my file. I clicked OK, and the Falkland Islands appeared in my Terrain Editor window, at the correct orientation, at perfect real-world scale.