Terragen and Balliwick help

well i wanted to start playing with OpenSim and well uhmm one problem.
it seems terragen changed the file extension and now Balliwick does not understand them if i force the name to be .ter not .tgw

is there a workaround on this or am i up the river with no paddle.

**** edit
correction
sorry looks i am a total dunder head.
i just now noticed the save texture not save world
lol
*****edit 2
well i gots the image t work but now one problem.
my sim becomes as the image but there is a small section that is raised higher then the edge of them sim and has well it looks like you can see through it.

When I have done raw file terrains I did mine in Photoshop, you only need the colors
black and white and shades of grey. Black = 0 , White = 255 and the standard water level
is 20m which corresponds to a dark grey of 20. So what I would do in my image is make
the background black and then use white to create the outline shape of your terrain, this is in order to see what your doing. As it can be difficult to see the differences clearly between
water level at 20 and say a gradually ascending shoreline. When doing it this way it is good to
use multiple layers so you can have your water layer and build up from there with the shade
getting lighter in areas that are higher in elevation. make sure to darken any layers that need it to corrrespond in relation to the 20 m water level before flattening.

One client I had liked making his sims into the shape of his logo, which was only maybe ten
meters higher than the water level which these shades made my flattened image very dark.
So I did my work with lighter colors then darkened everything down to the correct shades/height.

The method I used to preview it was by using the newly created height map applied to a terrain in Bryce, which worked very well. I am not too familiar with Terragen but I am pretty sure you can preview height maps in a similar manner in it.

I also looked at some of the programs available to work with height maps and decided that
they seemed either overly complicated or just clunky to work with.
Doing the height map in a graphics editor like PS or any other one is actually very easy.
The tricky part was making sure that I put my height map in the correct channel.
Definitely read this SL Raw files page if you havent already.
Tips for Creating Heightfields and Details on Terrain RAW Files
The next two sites are for help on the programs you mentioned.

Spinmass
Terragen Official Guide