Here are some FREE Terrain/Heightmap editors that I have gathered and tested, language denotes opensource licensing.
TerreSculptor HMES
(Alpha, Windows)
Lithosphere
(Python)
Scape Editor
(
Binaries
, C++)
L3DT Standard Edition
(Free, Windows)
Torque3D Terrain Editor
(Windows/Linux, C++)
Updated/Suggestions:
IrrRPGBuilder
(MIT/X11)
Artifex Terra 3D
(Free, Windows)
cheers