yes. that's exactly the thing.
take a simple landscape tile. Now it has 4 points. and two polys. (DBpro doesn't seem to like quads) First you simply figure out which poly you are in. or actually just the 3 points near to it. (You don't have to do this and just use quad, but this way it's a lot more accurate). that's quite simple, as they are always the same way. then you simple trig to interpolate the height difference based on your x,y pos.
(Linear) Interpolation is used everywhere.
Let's say you have two values. 100 and 200, for example.
Now if you want to get the value in between, all you need to do is get the difference (diff=200-100) and then multiply it with the "percentage" you wanted (diff=diff*0.5) and then add it to the start value (result = 100 + diff). And you get 150. simple as that.
Linear interpolation is just this simple, and all you need to figure out the height based on few points. (though there's 2 dimensions)
http://www.cs.brown.edu/stc/outrea/greenhouse/nursery/interpolation/itworks.html
there are, however, loads of ready code available at different places... so if you're lazy, you don't have to figure it all out.
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