Well, what is it? The simple answer is: it's the program you need to make those sort of images you find everywhere around this site. Every image on this site has been made using Terragen 2, a fantastic application from Planetside Software.
But Terragen 2 is not a graphics program, not a paint or modelling application. None of the images around here are drawn in any way. Instead, they are constructed by applying the most sophisticated and advanced landscape rendering algorithms on earth today - and the beauty is, that you don't need to know anyhing about those things to make your own great images!
"Rendering" sounds like a scary word, but it is actually not. Not for you, because the renderer is your servant, and you are its master. As the master, you "tell" Terragen 2 exactly how you want your landscape scene to be and look like. Once you have given all your instructions (mountain here, sun position there, a bed of rocks here at the shore...), the renderer puts your vision into production. The end result is a photo realistic still image or animation.
Granted, you won't get around learning a few things on how to operate in the Terragen 2 user interface and learn to understand a few concepts on how Terragen 2 works, but candidly, this is part of the fun. Every day, Terragen 2 let's you discover something new, while you learn as you go.
With Terragen 2, you can create photo realistic landscapes and landscape scenes of all kinds. The reason why images made with it are more realistic than any other application lie in its specialization in landscape rendering, and the decade long experience of the Planetside development team.
Terragen 2 is available on the Mac and Windows platforms, and supports multi-threaded rendering, meaning finally an application that fully uses your expensive quad core CPU ;-)
Terragen can be downloaded for free (with limitations here), or if you would like to benefit from better render output, higher resolutions than 800x600, and no restrictions on populations of vegetation and other objects, you better buy the full license.
Considering what Terragen 2 is capable of, and epecially compared to other render packages (which don't come near TG2's render quality), we at NWDA believe Terragen 2 is very, very cheap. If you don't need the animation module, you can get the full license of Terragen 2 at a low 299 USD here.
At the very least try out the free edition. If you need help: there is a friendly and helpful online forum and community here.