Terragen is pretty much the same as bryce, it makes landscapes based on a heightfield. The latest versions can produce some pretty impressive stuff, if you don't mind the lack of trees/etc on your terrain.
As for the sharp edges, I doubt blurring will do much. It looks like those sharp edges are caused by the heightfield being done 1 pixel = 1 vertex and then not putting in any segments to smooth the transition. Looks fine for distance stuff, but up close it is obviously fake. I don't know bryce, but what you probably want to do is collapse it to a mesh and then add the detail manually.
Texturing: again, I don't know bryce, but in 3dsmax you'd use a mix material with several different terrain textures in blended patches. And maybe a top/bottom material to set a snow/tree line. Hopefully bryce has something like that.