If you were using OpenGL, the card probably wouldn't allow you to load that large of a texture. I don't think D3D will let you either if you load it with the POOL_DEFAULT option. Just something to keep in mind.I made a fairly large terrain in bryce (cus its really quick and easy) and gave it a high res texture (something above 4000 X 4000 res)
Making a terrain by hand isn't all that uncommon, but I usually ask an artist to do that for me, and then yell at him/her when the poly density is higher than I told them. Not too loudly though. Your only other option would be real time generation. Throw a whole bunch of math at the card telling it to plot points along the way, and you're ready to go!