I use stryofoam and carve/cut/melt away (using a styrofoam cutter--available in the train/diorama section of your LHS) the contours of the terrain that I need. I then cover it all with plaster cloth (available in the train/diorama section of your LHS). If any adjustments are needed or extra smoothing/build-up of the terrain, I use drywall joint compound. Be sure to test fit your model(s) during this build up process. Next I press-in sand, pebbles and rocks (the stuff found in the gutter or next to the curb in the street works GREAT!) followed by a liberal brush coating of white glue to lock everything down.
Once that's all dry, I coat with a plaster sealant (available in the Craft Paint section of Wal-Mart or K-Mart or similar store), then paint the basic ground color. Followed by any grass (static grass) and trees (dried roots).
Using styrofoam as your base is nice because when you add the trees, you just punch a small hole through the thin plaster layer, fill the hole with white glue and position your "tree." The foam and plaster help hold the tree in place until the glue dries.
I then glue the styrofoam groundwork to the finished and sealed wooden plaque to complete the base.
This whole process takes a few hours and I usually have complete dio base done within a day (usually, 4-8 hours).