I just checked in some modifications to the
Irrlicht Engine source which will make it possible for
irrEdit, the free world editor to place and edit the parameters of terrain scene nodes. This doesn't mean that editing terrain heightmaps will be possible, but placing and adjusting terrain scene node parameters is already a big step forward, because a lot of games are using terrain heightmaps instead of meshes. Here's a shot:

(Yep, that tudor house model is borrowed ;) )
And as you can see, irrEdit is running again. I finally finished
refactoring the whole irrEdit application, and mostly everything works now. Software based global illumination is disabled currently (hardware based GI works) for example, but there is already an libIrrEdit.dll file which can be reused by plugins and games. Ah, yes, and irrEdit now supports plugins. With the next release, it will be possible to enhance irrEdit with own scene nodes, animators, and you will also be able to run and test your game directly inside irrEdit, with the scene you are working on. Other engines call this WYSIWYP (=what you see is what you play). I'm going to write some examples for this as well.
I hope to release all this in the next two weeks.