Method:
There are 2 methods for generating terrain. The first (and default) is a Plasma method. This method generates a plasma field using Sub-Division to generate the terrain. The second method is Block Soften. This method randomly places blocks at random heights and then softens the result. Block soften has a tendancy to result it a more random style of terrain, but often times is less realistic that Plasma method.

Topographics:
Land Flattening adjusts how much the land will be either plains or mountains. The higher the percentage of land flattening, the more the terrain will resemble plains. Lower percentages create more of a mountain range. Base Water Coverage indicates how much of the terrain will be covered in water. This sets the starting water coverage before terrain is created. Since terrain creation is random, this is only a base-line to the end result. Even with base water coverage at 50% it's possible the end result could be 5% or 95% of water. But as it is a base-line, it will more often result in water coverage closer to the setting.

Erosion Softness will erode the terrain after it is generated. Without eroding the terrain, the result of generation is not very good because the slight variances in height are magnified in the Terraformer. It is not recommended to have no erosion at all. Also note, if you erode too much, it will also effect how much water and land height the end result has.

Extras
Edge's Stay Above Water Level will keep the edges of the terrain up around water level. This helps prevent the "artifacts" in the NL Simulator that can occur when water goes all the way to the edge of the terrain area. It is recommended to always leave this enabled.