G'day mjolnir,
Indeed, the process you suggest (the creation of displacement maps) is only one way that you can achieve the results you want, depending upon what those results are. If you are hoping to have the terrain of your route (note the use of this term and do not confuse it with my further use of the word "map" - which will refer to the Topographic map that you already have in your possession), which will hence forth refer to the creation in Trainz, match the terrain in th ererakl world, there are better and much less tedious methods you can use.
Firstly, if all you want to do is use the map to get things basically, in the right place without worrying about the terrain, you can resort to the method know as "base boarding". This involves the use of especially designed 1 km square 'planes' to which an appropriately sized image can be 'attached', which can then be placed on the terrain and moved vertically, so that the roads, rivers and railway lines can be 'traced' on top the flat terrain (this method can also be used to do the same with 'shaped' terrain - though with slightly less ease). If you do a search through these forums for the term "base boards", you should find much information on the process and where to look on the download station for these devices.
However, if you are keener than this and want to include the proper terrain (as per the real world) and the contents of your map along with it there-on, the process gets a little more complicated. I would suggest that start your search by looking for the keywords MicroDEM, DEM, TransDEM, Global Mapper and HOG, all of which will provide you with sufficient answers for you to at form an informed opinion as to which process is best suited to your needs and from which we can discuss matters further...
Jerker {

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