Just been reading this thread as i was trying without much success to create a terrain model last night. It's a shame there isn't a tool on the horizon which might help us out here. You would think that loft would work but as has already been discussed it breaks down especially when combining curved and straight curves.

@Pilou, Your sandbox solution seems the best and I have given it a go but my problem is that even with weld veticies along edges selected my moi lines are split up into unconected segments when opened in sketchup. How do you create your contours?

@Michael - still no plans for some sort of magic tool which would be good at this type of work? On the outside, to me anyway, it looks like NURBS should be ideal for creating smooth landscaping with roads, pavements and curbs easily added, certainly when compared to making a poly mesh which can be faceted and fidly to adjust with its many points... Strange!

Cheers