Terragen is a really really cool (and free (: ) software which is used to make realistic looking terrains and Landscapes. It's so damn easy, that the first landscape I've made came out really good and it took the software just 20 minutes to render it (The likes of Lightwave [another 3D modeling software] would have taken at least an hour and a half). A nice looking sunset scene :)
Here is the second one I made. This time I have painted and sculpted the terrain and generated the clouds. Nice mountainous river banks and a gentle rippling river...
Over all, I'm very very happy with this thing. It really satisfies me. I found it very easy (maybe because I have some experience with 3D Modeling). The biggest plus point is that it generates great looking terrains with very little hard work. If you use a couple of plugins, you can make really cool sky boxes (A 3D landscape where you can turn around and see the whole landscape as if you were standing there!!!).
Even if you don't know anything, it always yeilds good result. This is the last one I made (titled "Unreal") I really didn't do anything, just randomly tweak the controls and options for 3 minutes and then render the whole landscape, which took another 8 minutes :)
The official webpage