It'll be quite exhausting if I made up an algorithm here, from scratch. But I can give you a simple impression.
Assuming you're using 2D this means that you'll need tile graphics that fit perfectly (and nothing less) on each other.
You can give each tile a value for it's base coördinate (not elevated) and a value for it's height (and much more other values, as the slope value mentioned by vleugel), to indicate where the graphic will be drawn. Then you make sure each tile is being in the right order (with Z-index values for example) - And voila you will have a map.
The prerendering method as I mentioned early, will probably not work quite well with these editors, as the whole map has to be re-rendered each time you heighten the terrain.