A better suggestion is to return a integer value depending on the reason for the failure, i.e., 0 for no error, 1 for allocation error, 2 for file not found, etc.
 
You should also be doing exception handling:
 

try{
	m_Terrain = new TerrainHandle;
}
catch(std::bad_alloc)
{
	MessageBox(hwnd, L"Could not create TerrainHandle object.", L"Error", MB_OK);
	return false;
}

A better suggestion is to return a integer value depending on the reason for the failure, i.e., 0 for no error, 1 for allocation error, 2 for file not found, etc.