How is it possible to generate such a well eroded terrain??
Many games generate their terrain using artist-driven tools. For example, the mountains in my current project are being created by:
* first a very low polygon mesh defining their overall shape is created.
* then in world machine, a few mountains are eroded to use as 'templates'.
* these 'templates' are then imported into zbrush as brushes that the artist can use to 'paint' on erosion details.
* the low-polygon mountains are then sculpted into highly-detailed mountains by using these "erostion brushes".
* texture masks are then automatically generated and/or painted onto the mesh (for grass/rock/dirt/paths/etc).
* at run-time, the terrain is textured using these masks, which may add more details via bump/parallax/displacement mapping.
For examples of having a stone path naturally emerge from terrain, using only texturing, see the QDM presentation.