While it will never face up to terragen and all those fancy alpha maps, TGE terrain editor has a few tricks up it's sleeve.
You can 'generate' terrain using premade algorithims in the F11 editor. These include smoothing, canyons and more. It can also do the thing that wizzard mentioned.
I believe that the tools that most (including myself) use such as adjust height, smooth, ect are only there as touch-up tools.