Technology: Heightmaps vs. Static meshes

Heightmaps: A grayscale image used to displace a mesh. Several textures are usually applied.
Pros: Low GPU usage, LOD, Allows creation of high-quality terrain
Cons: No overhanging
Best For: Large amounts of "base terrain", e.g., extra static meshes placed on the heightmap.

Static mesh: A true 3D mesh.
Pros: Allows for over-hanging
Cons: High GPU usage, Forces creation of low-poly terrain.
Best For: Cliffs, Objects, Buildings, etc.