Theres better! I found this site http://www.satimagingcorp.com/svc/3dterrain.html to be a little more user friendly. Anyways I haven't fig. out how the elevation data comes in a file yet myself! Maybe tomorrow I will fig. it out if not too busy. The photos look great with the GeoEye-1 and was used for TomClancy's Hawx 2...If you fig. it out first plz let me know....
Anyways it takes a little digging for free DEM data downloads. I'm not looking for anything in paticular, I was just briefly checking into the process myself of how it's done. There are some great tools and reference from someone on these pages also...http://www.terrainmap.com/ and "Free Data" free to use software tools at the bottom of page http://www.terrainmap.com/rm39.html
What I do is take the images into Photoshop and adjust the levels so the heightmap data is Unreal friendly. Then I do a lens blur with a radius of 6. It's still a bit pixilated when you look at it from a distance, but you can use the Landscape tool to smooth it out a bit. You don't want to blur too much or all of the rockiness of the heightmap will just end up being rounded hills.
I only do this for distance hill mesh. Everything near the gameplay area is hand painted.
I believe you could also take the heightmap image into mudbox, smooth out the pixilation generate a much higher rez heightmap and go from there.