You can check out Stitchscape a very nifty tool over at http://www.starscenesoftware.com/Utilities.html#Stitchscape

or have a look here if you want to do all the dirty work yourself

http://forum.unity3d.com/threads/27402-How-to-stitch-terrain

Anyone have any ideas on this?

Meanwhile, I tried using prefabs to instantiate new terrains, but the prefab seems to be sharing the TerrainData object across all instances. So everytime I instantiate a new terrain object from the prefab, it seems to have all the features of the terrain already in the system.

I need to modify the terrain on the fly. I'm assuming the second technique (which looks pretty good in itself) must be the way to go...

Anyone have any other ideas? Also, is there a way of unloading and reloading terrain meshes? However, I also do need to save the state of the terrain so when I come back it's got the new modified terrains.
- Sahil