Tony Thomas has created the Wargames Terrain Generator, a program that’s free for the downloading. He tells about it in an email: “What it does is allow you to create and customize a random terrain for your wargame of choice. Wargame terrain generator can also create an actual image of the table top using terrain images for battle reports and so forth (a basic terrain set is provided with the download). Wargame terrain generator is still currently in beta, so while all the functionality is working there is very little idiot proofing.”
Here’s a nice video that illustrates how bits of seeming junk can be turned into wargames terrain.
This Youtube video describes how to make hills for your miniature wargames without tools.