No real instructions on how to use it at the present time. Download it, open an SL region terrain RAW file, export a sculptie texture TGA so you can make little maps, etc. Source code will be available at some point.
Mac users should download the Mac version, although the Jar version will also work, but the menubars won't be as nice. Windows users can just double-click on the Jar file to launch it, assuming Java is installed correctly.
Download here:
TerrainTool (Mac OSX
Stuffit)
TerrainTool (Mac OSX Zip)
TerrainTool (All Platforms
w/Java, Executable Jar)
Note: TerrainTool currently uses Java3D, which may not be
already installed in your Java VM. The Macintosh version of Java appears
to include it, but Java on other platforms, such as Windows, may need to
you to install it yourself from here:
Java 3DTM
Downloads - Release Builds at Java.net
Future versions of TerrainTool will probably switch to Java OpenGL (JOGL).