Over the last 5 days or so there has been an interesting discussion going about game programming and landscapes at DelphiSanctuary the home page for Omega.
Lots of interesting stuff about shading and placing of sprites on a landscape etc.
There are now two 3d landscape example programs with source available. They include sprites that move around the landscape. The basics are there to make a really cool game.
Check them out here
I would think it would be quite a good idea to convert these to Asphyre or some other gfx library. SO I am hoping others might do that.
For some screen shots of the two engines checkout