diff --git a/apps/openmw/engine.cpp b/apps/openmw/engine.cpp
index 23e94cb51..62a15fbf9 100644
--- a/apps/openmw/engine.cpp
+++ b/apps/openmw/engine.cpp
@@ -69,8 +69,8 @@ void OMW::Engine::setAnimationVerbose(bool animverbose)
 
 bool OMW::Engine::frameStarted (const Ogre::FrameEvent& evt)
 {
-    if (!MWBase::Environment::get().getWindowManager()->isGuiMode())
-        MWBase::Environment::get().getWorld()->frameStarted(evt.timeSinceLastFrame);
+    bool paused = MWBase::Environment::get().getWindowManager()->isGuiMode();
+    MWBase::Environment::get().getWorld()->frameStarted(evt.timeSinceLastFrame, paused);
     MWBase::Environment::get().getWindowManager ()->frameStarted(evt.timeSinceLastFrame);
     return true;
 }
@@ -91,12 +91,12 @@ bool OMW::Engine::frameRenderingQueued (const Ogre::FrameEvent& evt)
             MWBase::Environment::get().getSoundManager()->update(frametime);
 
         // global scripts
-        //MWBase::Environment::get().getScriptManager()->getGlobalScripts().run();
+        MWBase::Environment::get().getScriptManager()->getGlobalScripts().run();
 
         bool changed = MWBase::Environment::get().getWorld()->hasCellChanged();
 
         // local scripts
-        //executeLocalScripts(); // This does not handle the case where a global script causes a cell
+        executeLocalScripts(); // This does not handle the case where a global script causes a cell
                                // change, followed by a cell change in a local script during the same
                                // frame.
 
diff --git a/apps/openmw/mwbase/world.hpp b/apps/openmw/mwbase/world.hpp
index 4b4ffd0d3..e2b8a236b 100644
--- a/apps/openmw/mwbase/world.hpp
+++ b/apps/openmw/mwbase/world.hpp
@@ -371,7 +371,7 @@ namespace MWBase
             /// \todo this does not belong here
             virtual void playVideo(const std::string& name, bool allowSkipping) = 0;
             virtual void stopVideo() = 0;
-            virtual void frameStarted (float dt) = 0;
+            virtual void frameStarted (float dt, bool paused) = 0;
 
             /// Find default position inside exterior cell specified by name
             /// \return false if exterior with given name not exists, true otherwise
diff --git a/apps/openmw/mwgui/settingswindow.cpp b/apps/openmw/mwgui/settingswindow.cpp
index 4ce6ac0bf..3dfa17bad 100644
--- a/apps/openmw/mwgui/settingswindow.cpp
+++ b/apps/openmw/mwgui/settingswindow.cpp
@@ -125,7 +125,7 @@ namespace MWGui
         getWidget(mActorShadows, "ActorShadows");
         getWidget(mStaticsShadows, "StaticsShadows");
         getWidget(mMiscShadows, "MiscShadows");
-        getWidget(mShadowsDebug, "ShadowsDebug");
+        getWidget(mTerrainShadows, "TerrainShadows");
         getWidget(mControlsBox, "ControlsBox");
         getWidget(mResetControlsButton, "ResetControlsButton");
         getWidget(mInvertYButton, "InvertYButton");
@@ -161,7 +161,7 @@ namespace MWGui
         mActorShadows->eventMouseButtonClick += MyGUI::newDelegate(this, &SettingsWindow::onButtonToggled);
         mStaticsShadows->eventMouseButtonClick += MyGUI::newDelegate(this, &SettingsWindow::onButtonToggled);
         mMiscShadows->eventMouseButtonClick += MyGUI::newDelegate(this, &SettingsWindow::onButtonToggled);
-        mShadowsDebug->eventMouseButtonClick += MyGUI::newDelegate(this, &SettingsWindow::onButtonToggled);
+        mTerrainShadows->eventMouseButtonClick += MyGUI::newDelegate(this, &SettingsWindow::onButtonToggled);
 
         mMasterVolumeSlider->eventScrollChangePosition += MyGUI::newDelegate(this, &SettingsWindow::onSliderChangePosition);
         mVoiceVolumeSlider->eventScrollChangePosition += MyGUI::newDelegate(this, &SettingsWindow::onSliderChangePosition);
@@ -238,7 +238,7 @@ namespace MWGui
         mActorShadows->setCaptionWithReplacing(Settings::Manager::getBool("actor shadows", "Shadows") ? "#{sOn}" : "#{sOff}");
         mStaticsShadows->setCaptionWithReplacing(Settings::Manager::getBool("statics shadows", "Shadows") ? "#{sOn}" : "#{sOff}");
         mMiscShadows->setCaptionWithReplacing(Settings::Manager::getBool("misc shadows", "Shadows") ? "#{sOn}" : "#{sOff}");
-        mShadowsDebug->setCaptionWithReplacing(Settings::Manager::getBool("debug", "Shadows") ? "#{sOn}" : "#{sOff}");
+        mTerrainShadows->setCaptionWithReplacing(Settings::Manager::getBool("terrain shadows", "Shadows") ? "#{sOn}" : "#{sOff}");
 
         float cameraSens = (Settings::Manager::getFloat("camera sensitivity", "Input")-0.2)/(5.0-0.2);
         mCameraSensitivitySlider->setScrollPosition (cameraSens * (mCameraSensitivitySlider->getScrollRange()-1));
@@ -394,8 +394,8 @@ namespace MWGui
                 Settings::Manager::setBool("statics shadows", "Shadows", newState);
             else if (_sender == mMiscShadows)
                 Settings::Manager::setBool("misc shadows", "Shadows", newState);
-            else if (_sender == mShadowsDebug)
-                Settings::Manager::setBool("debug", "Shadows", newState);
+            else if (_sender == mTerrainShadows)
+                Settings::Manager::setBool("terrain shadows", "Shadows", newState);
             else if (_sender == mInvertYButton)
                 Settings::Manager::setBool("invert y axis", "Input", newState);
             else if (_sender == mCrosshairButton)
diff --git a/apps/openmw/mwgui/settingswindow.hpp b/apps/openmw/mwgui/settingswindow.hpp
index 42ed5bf6d..a585bda7e 100644
--- a/apps/openmw/mwgui/settingswindow.hpp
+++ b/apps/openmw/mwgui/settingswindow.hpp
@@ -59,7 +59,7 @@ namespace MWGui
             MyGUI::Button* mActorShadows;
             MyGUI::Button* mStaticsShadows;
             MyGUI::Button* mMiscShadows;
-            MyGUI::Button* mShadowsDebug;
+            MyGUI::Button* mTerrainShadows;
 
             // audio
             MyGUI::ScrollBar* mMasterVolumeSlider;
diff --git a/apps/openmw/mwrender/renderingmanager.cpp b/apps/openmw/mwrender/renderingmanager.cpp
index 9f7fde10a..63de044c8 100644
--- a/apps/openmw/mwrender/renderingmanager.cpp
+++ b/apps/openmw/mwrender/renderingmanager.cpp
@@ -82,7 +82,7 @@ RenderingManager::RenderingManager(OEngine::Render::OgreRenderer& _rend, const b
         Settings::Manager::setString("shader mode", "General", openGL ? (glES ? "glsles" : "glsl") : "hlsl");
     }
 
-    mRendering.createScene("PlayerCam", Settings::Manager::getFloat("field of view", "General"), 50);
+    mRendering.createScene("PlayerCam", Settings::Manager::getFloat("field of view", "General"), 5);
 
     mRendering.getWindow()->addListener(this);
     mRendering.setWindowListener(this);
@@ -248,8 +248,10 @@ void RenderingManager::cellAdded (MWWorld::Ptr::CellStore *store)
     {
         if (!mTerrain)
         {
-            mTerrain = new Terrain::Terrain(mRendering.getScene(), new MWRender::TerrainStorage(), RV_Terrain);
-            mTerrain->update(mRendering.getCamera());
+            mTerrain = new Terrain::Terrain(mRendering.getScene(), new MWRender::TerrainStorage(), RV_Terrain,
+                                            Settings::Manager::getBool("distant land", "Terrain"),
+                                            Settings::Manager::getBool("shader", "Terrain"));
+            mTerrain->update(mRendering.getCamera()->getRealPosition());
         }
     }
     waterAdded(store);
@@ -554,13 +556,6 @@ void RenderingManager::setAmbientMode()
     }
 }
 
-float RenderingManager::getTerrainHeightAt(Ogre::Vector3 worldPos)
-{
-    assert(mTerrain);
-    return mTerrain->getHeightAt(worldPos);
-}
-
-
 void RenderingManager::configureAmbient(MWWorld::Ptr::CellStore &mCell)
 {
     mAmbientColor.setAsABGR (mCell.mCell->mAmbi.mAmbient);
@@ -658,9 +653,14 @@ void RenderingManager::requestMap(MWWorld::Ptr::CellStore* cell)
 {
     if (cell->mCell->isExterior())
     {
+        assert(mTerrain);
+
         Ogre::AxisAlignedBox dims = mObjects.getDimensions(cell);
-        Ogre::Vector2 center(cell->mCell->getGridX() + 0.5, -cell->mCell->getGridY() + 1 - 0.5);
+        Ogre::Vector2 center(cell->mCell->getGridX() + 0.5, cell->mCell->getGridY() + 0.5);
         dims.merge(mTerrain->getWorldBoundingBox(center));
+
+        mTerrain->update(dims.getCenter());
+
         mLocalMap->requestMap(cell, dims.getMinimum().z, dims.getMaximum().z);
     }
     else
@@ -992,12 +992,13 @@ void RenderingManager::updateWaterRippleEmitterPtr (const MWWorld::Ptr& old, con
     mWater->updateEmitterPtr(old, ptr);
 }
 
-void RenderingManager::frameStarted(float dt)
+void RenderingManager::frameStarted(float dt, bool paused)
 {
     if (mTerrain)
-        mTerrain->update(mRendering.getCamera());
+        mTerrain->update(mRendering.getCamera()->getRealPosition());
 
-    mWater->frameStarted(dt);
+    if (!paused)
+        mWater->frameStarted(dt);
 }
 
 void RenderingManager::resetCamera()
@@ -1005,4 +1006,10 @@ void RenderingManager::resetCamera()
     mCamera->reset();
 }
 
+float RenderingManager::getTerrainHeightAt(Ogre::Vector3 worldPos)
+{
+    assert(mTerrain);
+    return mTerrain->getHeightAt(worldPos);
+}
+
 } // namespace
diff --git a/apps/openmw/mwrender/renderingmanager.hpp b/apps/openmw/mwrender/renderingmanager.hpp
index c4fb05804..ea6e8d409 100644
--- a/apps/openmw/mwrender/renderingmanager.hpp
+++ b/apps/openmw/mwrender/renderingmanager.hpp
@@ -157,6 +157,8 @@ public:
     bool occlusionQuerySupported() { return mOcclusionQuery->supported(); }
     OcclusionQuery* getOcclusionQuery() { return mOcclusionQuery; }
 
+    float getTerrainHeightAt (Ogre::Vector3 worldPos);
+
     Shadows* getShadows();
 
     void switchToInterior();
@@ -164,8 +166,6 @@ public:
 
     void getTriangleBatchCount(unsigned int &triangles, unsigned int &batches);
 
-    float getTerrainHeightAt (Ogre::Vector3 worldPos);
-
     void setGlare(bool glare);
     void skyEnable ();
     void skyDisable ();
@@ -209,7 +209,7 @@ public:
 
     void playVideo(const std::string& name, bool allowSkipping);
     void stopVideo();
-    void frameStarted(float dt);
+    void frameStarted(float dt, bool paused);
 
 protected:
     virtual void windowResized(int x, int y);
diff --git a/apps/openmw/mwrender/shadows.cpp b/apps/openmw/mwrender/shadows.cpp
index c28c01dcc..21bbe51b6 100644
--- a/apps/openmw/mwrender/shadows.cpp
+++ b/apps/openmw/mwrender/shadows.cpp
@@ -107,7 +107,8 @@ void Shadows::recreate()
     // Set visibility mask for the shadow render textures
     int visibilityMask = RV_Actors * Settings::Manager::getBool("actor shadows", "Shadows")
                             + (RV_Statics + RV_StaticsSmall) * Settings::Manager::getBool("statics shadows", "Shadows")
-                            + RV_Misc * Settings::Manager::getBool("misc shadows", "Shadows");
+                            + RV_Misc * Settings::Manager::getBool("misc shadows", "Shadows")
+            + RV_Terrain * (Settings::Manager::getBool("terrain shadows", "Shadows"));
     for (int i = 0; i < (split ? 3 : 1); ++i)
     {
         TexturePtr shadowTexture = mSceneMgr->getShadowTexture(i);
diff --git a/apps/openmw/mwworld/scene.cpp b/apps/openmw/mwworld/scene.cpp
index 03ddf2aa9..07155d349 100644
--- a/apps/openmw/mwworld/scene.cpp
+++ b/apps/openmw/mwworld/scene.cpp
@@ -1,5 +1,7 @@
 #include "scene.hpp"
 
+#include <OgreSceneNode.h>
+
 #include <components/nif/niffile.hpp>
 
 #include <libs/openengine/ogre/fader.hpp>
@@ -85,7 +87,6 @@ namespace MWWorld
         std::cout << "Unloading cell\n";
         ListAndResetHandles functor;
 
-        /*
         (*iter)->forEach<ListAndResetHandles>(functor);
         {
             // silence annoying g++ warning
@@ -96,7 +97,6 @@ namespace MWWorld
                 mPhysics->removeObject (node->getName());
             }
         }
-        */
 
         if ((*iter)->mCell->isExterior())
         {
@@ -150,7 +150,7 @@ namespace MWWorld
 
             // ... then references. This is important for adjustPosition to work correctly.
             /// \todo rescale depending on the state of a new GMST
-            //insertCell (*cell, true);
+            insertCell (*cell, true);
 
             mRendering.cellAdded (cell);
 
diff --git a/apps/openmw/mwworld/worldimp.cpp b/apps/openmw/mwworld/worldimp.cpp
index ced4b5faa..f0c55c43e 100644
--- a/apps/openmw/mwworld/worldimp.cpp
+++ b/apps/openmw/mwworld/worldimp.cpp
@@ -835,7 +835,7 @@ namespace MWWorld
         bool isPlayer = ptr == mPlayer->getPlayer();
         bool haveToMove = isPlayer || mWorldScene->isCellActive(*currCell);
 
-        if (false ) //*currCell != newCell)
+        if (*currCell != newCell)
         {
             removeContainerScripts(ptr);
 
@@ -1026,10 +1026,13 @@ namespace MWWorld
             return;
         }
 
-        float terrainHeight = -std::numeric_limits<float>().max();// mRendering->getTerrainHeightAt(pos);
+        if (ptr.getCell()->isExterior())
+        {
+            float terrainHeight = mRendering->getTerrainHeightAt(pos);
 
-        if (pos.z < terrainHeight)
-            pos.z = terrainHeight;
+            if (pos.z < terrainHeight)
+                pos.z = terrainHeight;
+        }
 
         ptr.getRefData().getPosition().pos[2] = pos.z + 20; // place slightly above. will snap down to ground with code below
 
@@ -1074,15 +1077,8 @@ namespace MWWorld
     {
         const int cellSize = 8192;
 
-        cellX = static_cast<int> (x/cellSize);
-
-        if (x<0)
-            --cellX;
-
-        cellY = static_cast<int> (y/cellSize);
-
-        if (y<0)
-            --cellY;
+        cellX = std::floor(x/cellSize);
+        cellY = std::floor(y/cellSize);
     }
 
     void World::doPhysics(const PtrMovementList &actors, float duration)
@@ -1682,9 +1678,9 @@ namespace MWWorld
         mRendering->stopVideo();
     }
 
-    void World::frameStarted (float dt)
+    void World::frameStarted (float dt, bool paused)
     {
-        mRendering->frameStarted(dt);
+        mRendering->frameStarted(dt, paused);
     }
 
     void World::activateDoor(const MWWorld::Ptr& door)
diff --git a/apps/openmw/mwworld/worldimp.hpp b/apps/openmw/mwworld/worldimp.hpp
index b2f6418a3..1e072e09a 100644
--- a/apps/openmw/mwworld/worldimp.hpp
+++ b/apps/openmw/mwworld/worldimp.hpp
@@ -415,7 +415,7 @@ namespace MWWorld
             /// \todo this does not belong here
             virtual void playVideo(const std::string& name, bool allowSkipping);
             virtual void stopVideo();
-            virtual void frameStarted (float dt);
+            virtual void frameStarted (float dt, bool paused);
 
             /// Find center of exterior cell above land surface
             /// \return false if exterior with given name not exists, true otherwise
diff --git a/components/terrain/chunk.cpp b/components/terrain/chunk.cpp
index c9a364dc4..7a81358d6 100644
--- a/components/terrain/chunk.cpp
+++ b/components/terrain/chunk.cpp
@@ -2,9 +2,6 @@
 
 #include <OgreSceneNode.h>
 #include <OgreHardwareBufferManager.h>
-#include <OgreMaterialManager.h>
-#include <OgreTechnique.h>
-#include <OgrePass.h>
 
 #include "quadtreenode.hpp"
 #include "terrain.hpp"
@@ -53,7 +50,6 @@ namespace Terrain
         mColourBuffer = mgr->createVertexBuffer(Ogre::VertexElement::getTypeSize(Ogre::VET_COLOUR),
                                                 mVertexData->vertexCount, Ogre::HardwareBuffer::HBU_STATIC);
 
-
         mNode->getTerrain()->getStorage()->fillVertexBuffers(lodLevel, mNode->getSize(), mNode->getCenter(),
                                                              mVertexBuffer, mNormalBuffer, mColourBuffer);
 
@@ -66,6 +62,8 @@ namespace Terrain
         mIndexData->indexStart = 0;
     }
 
+
+
     void Chunk::updateIndexBuffer()
     {
         // Fetch a suitable index buffer (which may be shared)
@@ -75,7 +73,7 @@ namespace Terrain
 
         for (int i=0; i<4; ++i)
         {
-            QuadTreeNode* neighbour = mNode->searchNeighbour((Direction)i);
+            QuadTreeNode* neighbour = mNode->getNeighbour((Direction)i);
 
             // If the neighbour isn't currently rendering itself,
             // go up until we find one. NOTE: We don't need to go down,
diff --git a/components/terrain/material.cpp b/components/terrain/material.cpp
index bd7501576..f85326492 100644
--- a/components/terrain/material.cpp
+++ b/components/terrain/material.cpp
@@ -106,6 +106,8 @@ namespace Terrain
                     Ogre::Pass* pass = technique->createPass();
                     pass->setLightingEnabled(false);
                     pass->setVertexColourTracking(Ogre::TVC_NONE);
+                    // TODO: How to handle fog?
+                    pass->setFog(true, Ogre::FOG_NONE);
 
                     bool first = (layer == mLayerList.begin());
 
@@ -127,9 +129,7 @@ namespace Terrain
                         tus->setTextureAddressingMode(Ogre::TextureUnitState::TAM_CLAMP);
 
                         float scale = (16/(16.f+1.f));
-                        float scroll = 1/16.f*0.5;
-                        tus->setTextureScale(scale,scale);
-                        tus->setTextureScroll(-scroll,-scroll);
+                        tus->setTextureScale(1.f/scale,1.f/scale);
                     }
 
                     // Add the actual layer texture on top of the alpha map.
@@ -150,6 +150,7 @@ namespace Terrain
                     Ogre::Pass* lightingPass = technique->createPass();
                     lightingPass->setSceneBlending(Ogre::SBT_MODULATE);
                     lightingPass->setVertexColourTracking(Ogre::TVC_AMBIENT|Ogre::TVC_DIFFUSE);
+                    lightingPass->setFog(true, Ogre::FOG_NONE);
                 }
             }
 
diff --git a/components/terrain/material.hpp b/components/terrain/material.hpp
index 749e806ad..068bb7a84 100644
--- a/components/terrain/material.hpp
+++ b/components/terrain/material.hpp
@@ -18,6 +18,7 @@ namespace Terrain
         void setLayerList (const std::vector<std::string>& layerList) { mLayerList = layerList; }
         bool hasLayers() { return mLayerList.size(); }
         void setBlendmapList (const std::vector<Ogre::TexturePtr>& blendmapList) { mBlendmapList = blendmapList; }
+        const std::vector<Ogre::TexturePtr>& getBlendmapList() { return mBlendmapList; }
         void setCompositeMap (const std::string& name) { mCompositeMap = name; }
 
         /// Creates a material suitable for displaying a chunk of terrain using alpha-blending.
diff --git a/components/terrain/quadtreenode.cpp b/components/terrain/quadtreenode.cpp
index 8ebfafeb4..ce94d62a7 100644
--- a/components/terrain/quadtreenode.cpp
+++ b/components/terrain/quadtreenode.cpp
@@ -142,17 +142,21 @@ QuadTreeNode::QuadTreeNode(Terrain* terrain, ChildDirection dir, float size, con
     , mTerrain(terrain)
     , mChunk(NULL)
     , mMaterialGenerator(NULL)
+    , mBounds(Ogre::AxisAlignedBox::BOX_NULL)
+    , mWorldBounds(Ogre::AxisAlignedBox::BOX_NULL)
 {
     mBounds.setNull();
     for (int i=0; i<4; ++i)
         mChildren[i] = NULL;
+    for (int i=0; i<4; ++i)
+        mNeighbours[i] = NULL;
 
     mSceneNode = mTerrain->getSceneManager()->getRootSceneNode()->createChildSceneNode(
                 Ogre::Vector3(mCenter.x*8192, mCenter.y*8192, 0));
 
     mLodLevel = log2(mSize);
 
-    mMaterialGenerator = new MaterialGenerator(true);
+    mMaterialGenerator = new MaterialGenerator(mTerrain->getShadersEnabled());
 }
 
 void QuadTreeNode::createChild(ChildDirection id, float size, const Ogre::Vector2 &center)
@@ -168,38 +172,40 @@ QuadTreeNode::~QuadTreeNode()
     delete mMaterialGenerator;
 }
 
-QuadTreeNode* QuadTreeNode::searchNeighbour(Direction dir)
+QuadTreeNode* QuadTreeNode::getNeighbour(Direction dir)
 {
-    return searchNeighbourRecursive(this, dir);
+    return mNeighbours[static_cast<int>(dir)];
+}
+
+void QuadTreeNode::initNeighbours()
+{
+    for (int i=0; i<4; ++i)
+        mNeighbours[i] = searchNeighbourRecursive(this, (Direction)i);
+}
+
+void QuadTreeNode::initAabb()
+{
+    if (hasChildren())
+    {
+        for (int i=0; i<4; ++i)
+        {
+            mChildren[i]->initAabb();
+            mBounds.merge(mChildren[i]->getBoundingBox());
+        }
+        mBounds = Ogre::AxisAlignedBox (Ogre::Vector3(-mSize/2*8192, -mSize/2*8192, mBounds.getMinimum().z),
+                                        Ogre::Vector3(mSize/2*8192, mSize/2*8192, mBounds.getMaximum().z));
+    }
+    mWorldBounds = Ogre::AxisAlignedBox(mBounds.getMinimum() + Ogre::Vector3(mCenter.x*8192, mCenter.y*8192, 0),
+                                        mBounds.getMaximum() + Ogre::Vector3(mCenter.x*8192, mCenter.y*8192, 0));
+}
+
+void QuadTreeNode::setBoundingBox(const Ogre::AxisAlignedBox &box)
+{
+    mBounds = box;
 }
 
 const Ogre::AxisAlignedBox& QuadTreeNode::getBoundingBox()
 {
-    if (mIsDummy)
-        return Ogre::AxisAlignedBox::BOX_NULL;
-    if (mBounds.isNull())
-    {
-        if (hasChildren())
-        {
-            // X and Y are obvious, just need Z
-            float min = std::numeric_limits<float>().max();
-            float max = -std::numeric_limits<float>().max();
-            for (int i=0; i<4; ++i)
-            {
-                QuadTreeNode* child = getChild((ChildDirection)i);
-                float v = child->getBoundingBox().getMaximum().z;
-                if (v > max)
-                    max = v;
-                v = child->getBoundingBox().getMinimum().z;
-                if (v < min)
-                    min = v;
-            }
-            mBounds = Ogre::AxisAlignedBox (Ogre::Vector3(-mSize/2*8192, -mSize/2*8192, min),
-                                            Ogre::Vector3(mSize/2*8192, mSize/2*8192, max));
-        }
-        else
-            throw std::runtime_error("Leaf node should have bounds set!");
-    }
     return mBounds;
 }
 
@@ -209,11 +215,19 @@ void QuadTreeNode::update(const Ogre::Vector3 &cameraPos)
     if (bounds.isNull())
         return;
 
-    Ogre::AxisAlignedBox worldBounds (bounds.getMinimum() + Ogre::Vector3(mCenter.x*8192, mCenter.y*8192, 0),
-                                      bounds.getMaximum() + Ogre::Vector3(mCenter.x*8192, mCenter.y*8192, 0));
+    float dist = distance(mWorldBounds, cameraPos);
+
+    if (!mTerrain->getDistantLandEnabled())
+    {
+        if (dist > 8192*2)
+        {
+            destroyChunks();
+            return;
+        }
+    }
 
-    float dist = distance(worldBounds, cameraPos);
     /// \todo implement error metrics or some other means of not using arbitrary values
+    ///  (general quality needs to be user configurable as well)
     size_t wantedLod = 0;
     if (dist > 8192*1)
         wantedLod = 1;
@@ -230,6 +244,7 @@ void QuadTreeNode::update(const Ogre::Vector3 &cameraPos)
 
     if (mSize <= mTerrain->getMaxBatchSize() && mLodLevel <= wantedLod)
     {
+        bool hadChunk = hasChunk();
         // Wanted LOD is small enough to render this node in one chunk
         if (!mChunk)
         {
@@ -250,14 +265,32 @@ void QuadTreeNode::update(const Ogre::Vector3 &cameraPos)
             }
         }
 
+        // Additional (index buffer) LOD is currently disabled.
+        // This is due to a problem with the LOD selection when a node splits.
+        // After splitting, the distance is measured from the children's bounding boxes, which are possibly
+        // further away than the original node's bounding box, possibly causing a child to switch to a *lower* LOD
+        // than the original node.
+        // In short, we'd sometimes get a switch to a lesser detail when actually moving closer.
+        // This wouldn't be so bad, but unfortunately it also breaks LOD edge connections if a neighbour
+        // node hasn't split yet, and has a higher LOD than our node's child:
+        //  ----- ----- ------------
+        // | LOD | LOD |            |
+        // |  1  |  1  |            |
+        // |-----|-----|   LOD 0    |
+        // | LOD | LOD |            |
+        // |  0  |  0  |            |
+        //  ----- ----- ------------
+        // To prevent this, nodes of the same size need to always select the same LOD, which is basically what we're
+        // doing here.
+        // But this "solution" does increase triangle overhead, so eventually we need to find a more clever way.
+        //mChunk->setAdditionalLod(wantedLod - mLodLevel);
 
-        mChunk->setAdditionalLod(wantedLod - mLodLevel);
         mChunk->setVisible(true);
 
-        if (hasChildren())
+        if (!hadChunk && hasChildren())
         {
             for (int i=0; i<4; ++i)
-                mChildren[i]->removeChunks();
+                mChildren[i]->hideChunks();
         }
     }
     else
@@ -272,15 +305,41 @@ void QuadTreeNode::update(const Ogre::Vector3 &cameraPos)
     }
 }
 
-void QuadTreeNode::removeChunks()
+void QuadTreeNode::hideChunks()
 {
     if (mChunk)
         mChunk->setVisible(false);
-    if (hasChildren())
-    {
+    else if (hasChildren())
         for (int i=0; i<4; ++i)
-            mChildren[i]->removeChunks();
+            mChildren[i]->hideChunks();
+}
+
+void QuadTreeNode::destroyChunks()
+{
+    if (mChunk)
+    {
+        Ogre::MaterialManager::getSingleton().remove(mChunk->getMaterial()->getName());
+        mSceneNode->detachObject(mChunk);
+
+        delete mChunk;
+        mChunk = NULL;
+        // destroy blendmaps
+        if (mMaterialGenerator)
+        {
+            const std::vector<Ogre::TexturePtr>& list = mMaterialGenerator->getBlendmapList();
+            for (std::vector<Ogre::TexturePtr>::const_iterator it = list.begin(); it != list.end(); ++it)
+                Ogre::TextureManager::getSingleton().remove((*it)->getName());
+            mMaterialGenerator->setBlendmapList(std::vector<Ogre::TexturePtr>());
+            mMaterialGenerator->setLayerList(std::vector<std::string>());
+            mMaterialGenerator->setCompositeMap("");
+        }
+
+        Ogre::TextureManager::getSingleton().remove(mCompositeMap->getName());
+        mCompositeMap.setNull();
     }
+    else if (hasChildren())
+        for (int i=0; i<4; ++i)
+            mChildren[i]->destroyChunks();
 }
 
 void QuadTreeNode::updateIndexBuffers()
@@ -312,7 +371,7 @@ void QuadTreeNode::ensureLayerInfo()
 
     std::vector<Ogre::TexturePtr> blendmaps;
     std::vector<std::string> layerList;
-    mTerrain->getStorage()->getBlendmaps(mSize, mCenter, true, blendmaps, layerList);
+    mTerrain->getStorage()->getBlendmaps(mSize, mCenter, mTerrain->getShadersEnabled(), blendmaps, layerList);
 
     mMaterialGenerator->setLayerList(layerList);
     mMaterialGenerator->setBlendmapList(blendmaps);
@@ -324,7 +383,9 @@ void QuadTreeNode::prepareForCompositeMap(Ogre::TRect<float> area)
 
     if (mIsDummy)
     {
-        MaterialGenerator matGen(true);
+        // TODO - why is this completely black?
+        // TODO - store this default material somewhere instead of creating one for each empty cell
+        MaterialGenerator matGen(mTerrain->getShadersEnabled());
         std::vector<std::string> layer;
         layer.push_back("_land_default.dds");
         matGen.setLayerList(layer);
@@ -357,12 +418,6 @@ void QuadTreeNode::prepareForCompositeMap(Ogre::TRect<float> area)
     }
 }
 
-
-bool QuadTreeNode::hasCompositeMap()
-{
-    return !mCompositeMap.isNull();
-}
-
 void QuadTreeNode::ensureCompositeMap()
 {
     if (!mCompositeMap.isNull())
diff --git a/components/terrain/quadtreenode.hpp b/components/terrain/quadtreenode.hpp
index b68d6ab82..1b7c71b5b 100644
--- a/components/terrain/quadtreenode.hpp
+++ b/components/terrain/quadtreenode.hpp
@@ -49,6 +49,13 @@ namespace Terrain
         QuadTreeNode (Terrain* terrain, ChildDirection dir, float size, const Ogre::Vector2& center, QuadTreeNode* parent);
         ~QuadTreeNode();
 
+        /// Initialize neighbours - do this after the quadtree is built
+        void initNeighbours();
+        /// Initialize bounding boxes of non-leafs by merging children bounding boxes.
+        /// Do this after the quadtree is built - note that leaf bounding boxes
+        /// need to be set first via setBoundingBox!
+        void initAabb();
+
         /// @note takes ownership of \a child
         void createChild (ChildDirection id, float size, const Ogre::Vector2& center);
 
@@ -66,15 +73,15 @@ namespace Terrain
         bool hasChildren() { return mChildren[0] != 0; }
         QuadTreeNode* getChild(ChildDirection dir) { return mChildren[dir]; }
 
-        /// Search for a neighbour node in this direction
-        QuadTreeNode* searchNeighbour (Direction dir);
+        /// Get neighbour node in this direction
+        QuadTreeNode* getNeighbour (Direction dir);
 
         /// Returns our direction relative to the parent node, or Root if we are the root node.
         ChildDirection getDirection() { return mDirection; }
 
         /// Set bounding box in local coordinates. Should be done at load time for leaf nodes.
         /// Other nodes can merge AABB of child nodes.
-        void setBoundingBox (const Ogre::AxisAlignedBox& box) { mBounds = box; }
+        void setBoundingBox (const Ogre::AxisAlignedBox& box);
 
         /// Get bounding box in local coordinates
         const Ogre::AxisAlignedBox& getBoundingBox();
@@ -88,8 +95,11 @@ namespace Terrain
         /// Call after QuadTreeNode::update!
         void updateIndexBuffers();
 
-        /// Remove chunks rendered by this node and all its children
-        void removeChunks();
+        /// Hide chunks rendered by this node and all its children
+        void hideChunks();
+
+        /// Destroy chunks rendered by this node and all its children
+        void destroyChunks();
 
         /// Get the effective LOD level if this node was rendered in one chunk
         /// with ESM::Land::LAND_SIZE^2 vertices
@@ -101,8 +111,6 @@ namespace Terrain
         /// Is this node currently configured to render itself?
         bool hasChunk();
 
-        bool hasCompositeMap();
-
         /// Add a textured quad to a specific 2d area in the composite map scenemanager.
         /// Only nodes with size <= 1 can be rendered with alpha blending, so larger nodes will simply
         /// call this method on their children.
@@ -118,6 +126,7 @@ namespace Terrain
         float mSize;
         size_t mLodLevel; // LOD if we were to render this node in one chunk
         Ogre::AxisAlignedBox mBounds;
+        Ogre::AxisAlignedBox mWorldBounds;
         ChildDirection mDirection;
         Ogre::Vector2 mCenter;
 
@@ -125,6 +134,7 @@ namespace Terrain
 
         QuadTreeNode* mParent;
         QuadTreeNode* mChildren[4];
+        QuadTreeNode* mNeighbours[4];
 
         Chunk* mChunk;
 
diff --git a/components/terrain/storage.cpp b/components/terrain/storage.cpp
index eb2763d94..800af3282 100644
--- a/components/terrain/storage.cpp
+++ b/components/terrain/storage.cpp
@@ -53,6 +53,51 @@ namespace Terrain
     }
 
     void Storage::fixNormal (Ogre::Vector3& normal, int cellX, int cellY, int col, int row)
+    {
+        while (col >= ESM::Land::LAND_SIZE-1)
+        {
+            ++cellY;
+            col -= ESM::Land::LAND_SIZE-1;
+        }
+        while (row >= ESM::Land::LAND_SIZE-1)
+        {
+            ++cellX;
+            row -= ESM::Land::LAND_SIZE-1;
+        }
+        while (col < 0)
+        {
+            --cellY;
+            col += ESM::Land::LAND_SIZE-1;
+        }
+        while (row < 0)
+        {
+            --cellX;
+            row += ESM::Land::LAND_SIZE-1;
+        }
+        ESM::Land* land = getLand(cellX, cellY);
+        if (land && land->mHasData)
+        {
+            normal.x = land->mLandData->mNormals[col*ESM::Land::LAND_SIZE*3+row*3];
+            normal.y = land->mLandData->mNormals[col*ESM::Land::LAND_SIZE*3+row*3+1];
+            normal.z = land->mLandData->mNormals[col*ESM::Land::LAND_SIZE*3+row*3+2];
+            normal.normalise();
+        }
+        else
+            normal = Ogre::Vector3(0,0,1);
+    }
+
+    void Storage::averageNormal(Ogre::Vector3 &normal, int cellX, int cellY, int col, int row)
+    {
+        Ogre::Vector3 n1,n2,n3,n4;
+        fixNormal(n1, cellX, cellY, col+1, row);
+        fixNormal(n2, cellX, cellY, col-1, row);
+        fixNormal(n3, cellX, cellY, col, row+1);
+        fixNormal(n4, cellX, cellY, col, row-1);
+        normal = (n1+n2+n3+n4);
+        normal.normalise();
+    }
+
+    void Storage::fixColour (Ogre::ColourValue& color, int cellX, int cellY, int col, int row)
     {
         if (col == ESM::Land::LAND_SIZE-1)
         {
@@ -65,12 +110,19 @@ namespace Terrain
             row = 0;
         }
         ESM::Land* land = getLand(cellX, cellY);
-        if (land && land->mHasData)
+        if (land && land->mLandData->mUsingColours)
         {
-            normal.x = land->mLandData->mNormals[col*ESM::Land::LAND_SIZE*3+row*3];
-            normal.y = land->mLandData->mNormals[col*ESM::Land::LAND_SIZE*3+row*3+1];
-            normal.z = land->mLandData->mNormals[col*ESM::Land::LAND_SIZE*3+row*3+2];
+            color.r = land->mLandData->mColours[col*ESM::Land::LAND_SIZE*3+row*3] / 255.f;
+            color.g = land->mLandData->mColours[col*ESM::Land::LAND_SIZE*3+row*3+1] / 255.f;
+            color.b = land->mLandData->mColours[col*ESM::Land::LAND_SIZE*3+row*3+2] / 255.f;
         }
+        else
+        {
+            color.r = 1;
+            color.g = 1;
+            color.b = 1;
+        }
+
     }
 
     void Storage::fillVertexBuffers (int lodLevel, float size, const Ogre::Vector2& center,
@@ -141,17 +193,21 @@ namespace Terrain
                             normal.x = land->mLandData->mNormals[col*ESM::Land::LAND_SIZE*3+row*3];
                             normal.y = land->mLandData->mNormals[col*ESM::Land::LAND_SIZE*3+row*3+1];
                             normal.z = land->mLandData->mNormals[col*ESM::Land::LAND_SIZE*3+row*3+2];
-                            // Normals don't connect seamlessly between cells - wtf?
-                            if (col == ESM::Land::LAND_SIZE-1 || row == ESM::Land::LAND_SIZE-1)
-                                fixNormal(normal, cellX, cellY, col, row);
-                            // z < 0 should never happen, but it does - I hate this data set...
-                            if (normal.z < 0)
-                                normal *= -1;
                             normal.normalise();
                         }
                         else
                             normal = Ogre::Vector3(0,0,1);
 
+                        // Normals apparently don't connect seamlessly between cells
+                        if (col == ESM::Land::LAND_SIZE-1 || row == ESM::Land::LAND_SIZE-1)
+                            fixNormal(normal, cellX, cellY, col, row);
+
+                        // some corner normals appear to be complete garbage (z < 0)
+                        if ((row == 0 || row == ESM::Land::LAND_SIZE-1) && (col == 0 || col == ESM::Land::LAND_SIZE-1))
+                            averageNormal(normal, cellX, cellY, col, row);
+
+                        assert(normal.z > 0);
+
                         normals[vertX*numVerts*3 + vertY*3] = normal.x;
                         normals[vertX*numVerts*3 + vertY*3 + 1] = normal.y;
                         normals[vertX*numVerts*3 + vertY*3 + 2] = normal.z;
@@ -168,6 +224,11 @@ namespace Terrain
                             color.g = 1;
                             color.b = 1;
                         }
+
+                        // Unlike normals, colors mostly connect seamlessly between cells, but not always...
+                        if (col == ESM::Land::LAND_SIZE-1 || row == ESM::Land::LAND_SIZE-1)
+                            fixColour(color, cellX, cellY, col, row);
+
                         color.a = 1;
                         Ogre::uint32 rsColor;
                         Ogre::Root::getSingleton().getRenderSystem()->convertColourValue(color, &rsColor);
@@ -193,18 +254,20 @@ namespace Terrain
     Storage::UniqueTextureId Storage::getVtexIndexAt(int cellX, int cellY,
                                            int x, int y)
     {
-        // If we're at the last row (or last column), we need to get the texture from the neighbour cell
-        // to get consistent blending at the border
-        if (x >= ESM::Land::LAND_TEXTURE_SIZE)
+        // For the first/last row/column, we need to get the texture from the neighbour cell
+        // to get consistent blending at the borders
+        --x;
+        if (x < 0)
         {
-            cellX++;
-            x -= ESM::Land::LAND_TEXTURE_SIZE;
+            --cellX;
+            x += ESM::Land::LAND_TEXTURE_SIZE;
         }
-        if (y >= ESM::Land::LAND_TEXTURE_SIZE)
+        if (y >= ESM::Land::LAND_TEXTURE_SIZE) // Y appears to be wrapped from the other side because why the hell not?
         {
-            cellY++;
+            ++cellY;
             y -= ESM::Land::LAND_TEXTURE_SIZE;
         }
+
         assert(x<ESM::Land::LAND_TEXTURE_SIZE);
         assert(y<ESM::Land::LAND_TEXTURE_SIZE);
 
@@ -226,7 +289,7 @@ namespace Terrain
     std::string Storage::getTextureName(UniqueTextureId id)
     {
         if (id.first == 0)
-            return "_land_default.dds"; // Not sure if the default texture really is hardcoded?
+            return "_land_default.dds"; // Not sure if the default texture floatly is hardcoded?
 
         // NB: All vtex ids are +1 compared to the ltex ids
         const ESM::LandTexture* ltex = getLandTexture(id.first-1, id.second);
@@ -241,6 +304,10 @@ namespace Terrain
     void Storage::getBlendmaps(float chunkSize, const Ogre::Vector2 &chunkCenter,
         bool pack, std::vector<Ogre::TexturePtr> &blendmaps, std::vector<std::string> &layerList)
     {
+        // TODO - blending isn't completely right yet; the blending radius appears to be
+        // different at a cell transition (2 vertices, not 4), so we may need to create a larger blendmap
+        // and interpolate the rest of the cell by hand? :/
+
         Ogre::Vector2 origin = chunkCenter - Ogre::Vector2(chunkSize/2.f, chunkSize/2.f);
         int cellX = origin.x;
         int cellY = origin.y;
@@ -253,7 +320,7 @@ namespace Terrain
         // To get a consistent look, we need to make sure to use the same base layer in all cells.
         // So we're always adding _land_default.dds as the base layer here, even if it's not referenced in this cell.
         textureIndices.insert(std::make_pair(0,0));
-        // NB +1 to get the last index from neighbour cell (see getVtexIndexAt)
+
         for (int y=0; y<ESM::Land::LAND_TEXTURE_SIZE+1; ++y)
             for (int x=0; x<ESM::Land::LAND_TEXTURE_SIZE+1; ++x)
             {
@@ -314,5 +381,90 @@ namespace Terrain
         }
     }
 
+    float Storage::getHeightAt(const Ogre::Vector3 &worldPos)
+    {
+        int cellX = std::floor(worldPos.x / 8192.f);
+        int cellY = std::floor(worldPos.y / 8192.f);
+
+        ESM::Land* land = getLand(cellX, cellY);
+        if (!land)
+            return -2048;
+
+        // Mostly lifted from Ogre::Terrain::getHeightAtTerrainPosition
+
+        // Normalized position in the cell
+        float nX = (worldPos.x - (cellX * 8192))/8192.f;
+        float nY = (worldPos.y - (cellY * 8192))/8192.f;
+
+        // get left / bottom points (rounded down)
+        float factor = ESM::Land::LAND_SIZE - 1.0f;
+        float invFactor = 1.0f / factor;
+
+        int startX = static_cast<int>(nX * factor);
+        int startY = static_cast<int>(nY * factor);
+        int endX = startX + 1;
+        int endY = startY + 1;
+
+        assert(endX < ESM::Land::LAND_SIZE);
+        assert(endY < ESM::Land::LAND_SIZE);
+
+        // now get points in terrain space (effectively rounding them to boundaries)
+        float startXTS = startX * invFactor;
+        float startYTS = startY * invFactor;
+        float endXTS = endX * invFactor;
+        float endYTS = endY * invFactor;
+
+        // get parametric from start coord to next point
+        float xParam = (nX - startXTS) * factor;
+        float yParam = (nY - startYTS) * factor;
+
+        /* For even / odd tri strip rows, triangles are this shape:
+        even     odd
+        3---2   3---2
+        | / |   | \ |
+        0---1   0---1
+        */
+
+        // Build all 4 positions in terrain space, using point-sampled height
+        Ogre::Vector3 v0 (startXTS, startYTS, getVertexHeight(land, startX, startY) / 8192.f);
+        Ogre::Vector3 v1 (endXTS, startYTS, getVertexHeight(land, endX, startY) / 8192.f);
+        Ogre::Vector3 v2 (endXTS, endYTS, getVertexHeight(land, endX, endY) / 8192.f);
+        Ogre::Vector3 v3 (startXTS, endYTS, getVertexHeight(land, startX, endY) / 8192.f);
+        // define this plane in terrain space
+        Ogre::Plane plane;
+        // (At the moment, all rows have the same triangle alignment)
+        if (true)
+        {
+            // odd row
+            bool secondTri = ((1.0 - yParam) > xParam);
+            if (secondTri)
+                plane.redefine(v0, v1, v3);
+            else
+                plane.redefine(v1, v2, v3);
+        }
+        else
+        {
+            // even row
+            bool secondTri = (yParam > xParam);
+            if (secondTri)
+                plane.redefine(v0, v2, v3);
+            else
+                plane.redefine(v0, v1, v2);
+        }
+
+        // Solve plane equation for z
+        return (-plane.normal.x * nX
+                -plane.normal.y * nY
+                - plane.d) / plane.normal.z * 8192;
+
+    }
+
+    float Storage::getVertexHeight(const ESM::Land *land, int x, int y)
+    {
+        assert(x < ESM::Land::LAND_SIZE);
+        assert(y < ESM::Land::LAND_SIZE);
+        return land->mLandData->mHeights[y * ESM::Land::LAND_SIZE + x];
+    }
+
 
 }
diff --git a/components/terrain/storage.hpp b/components/terrain/storage.hpp
index d55403d9c..419439e19 100644
--- a/components/terrain/storage.hpp
+++ b/components/terrain/storage.hpp
@@ -58,8 +58,14 @@ namespace Terrain
                            std::vector<Ogre::TexturePtr>& blendmaps,
                            std::vector<std::string>& layerList);
 
+        float getHeightAt (const Ogre::Vector3& worldPos);
+
     private:
         void fixNormal (Ogre::Vector3& normal, int cellX, int cellY, int col, int row);
+        void fixColour (Ogre::ColourValue& colour, int cellX, int cellY, int col, int row);
+        void averageNormal (Ogre::Vector3& normal, int cellX, int cellY, int col, int row);
+
+        float getVertexHeight (const ESM::Land* land, int x, int y);
 
         // Since plugins can define new texture palettes, we need to know the plugin index too
         // in order to retrieve the correct texture name.
diff --git a/components/terrain/terrain.cpp b/components/terrain/terrain.cpp
index c0f6cf2eb..d06394aca 100644
--- a/components/terrain/terrain.cpp
+++ b/components/terrain/terrain.cpp
@@ -51,12 +51,14 @@ namespace
 namespace Terrain
 {
 
-    Terrain::Terrain(Ogre::SceneManager* sceneMgr, Storage* storage, int visibilityFlags)
+    Terrain::Terrain(Ogre::SceneManager* sceneMgr, Storage* storage, int visibilityFlags, bool distantLand, bool shaders)
         : mStorage(storage)
         , mMinBatchSize(1)
         , mMaxBatchSize(64)
         , mSceneMgr(sceneMgr)
         , mVisibilityFlags(visibilityFlags)
+        , mDistantLand(distantLand)
+        , mShaders(shaders)
     {
         mCompositeMapSceneMgr = Ogre::Root::getSingleton().createSceneManager(Ogre::ST_GENERIC);
 
@@ -81,6 +83,8 @@ namespace Terrain
 
         mRootNode = new QuadTreeNode(this, Root, size, Ogre::Vector2(center.x, center.y), NULL);
         buildQuadTree(mRootNode);
+        mRootNode->initAabb();
+        mRootNode->initNeighbours();
     }
 
     Terrain::~Terrain()
@@ -136,14 +140,19 @@ namespace Terrain
         node->markAsDummy();
     }
 
-    void Terrain::update(Ogre::Camera *camera)
+    void Terrain::update(const Ogre::Vector3& cameraPos)
     {
-        mRootNode->update(camera->getRealPosition());
+        mRootNode->update(cameraPos);
         mRootNode->updateIndexBuffers();
     }
 
     Ogre::AxisAlignedBox Terrain::getWorldBoundingBox (const Ogre::Vector2& center)
     {
+        if (center.x > mBounds.getMaximum().x
+                 || center.x < mBounds.getMinimum().x
+                || center.y > mBounds.getMaximum().y
+                || center.y < mBounds.getMinimum().y)
+            return Ogre::AxisAlignedBox::BOX_NULL;
         QuadTreeNode* node = findNode(center, mRootNode);
         Ogre::AxisAlignedBox box = node->getBoundingBox();
         box.setExtents(box.getMinimum() + Ogre::Vector3(center.x, center.y, 0) * 8192,
@@ -220,10 +229,10 @@ namespace Terrain
             for (size_t col = colStart; col < colEnd; col += increment)
             {
                 indices.push_back(ESM::Land::LAND_SIZE*col+row);
-                indices.push_back(ESM::Land::LAND_SIZE*(col+increment)+row);
+                indices.push_back(ESM::Land::LAND_SIZE*(col+increment)+row+increment);
                 indices.push_back(ESM::Land::LAND_SIZE*col+row+increment);
 
-                indices.push_back(ESM::Land::LAND_SIZE*col+row+increment);
+                indices.push_back(ESM::Land::LAND_SIZE*col+row);
                 indices.push_back(ESM::Land::LAND_SIZE*(col+increment)+row);
                 indices.push_back(ESM::Land::LAND_SIZE*(col+increment)+row+increment);
             }
@@ -242,17 +251,18 @@ namespace Terrain
             {
                 indices.push_back(ESM::Land::LAND_SIZE*col+row);
                 indices.push_back(ESM::Land::LAND_SIZE*(col+outerStep)+row);
-                // Make sure not to touch the left edge
-                if (col == 0)
-                    indices.push_back(ESM::Land::LAND_SIZE*(col+innerStep)+row+innerStep);
+                // Make sure not to touch the right edge
+                if (col+outerStep == ESM::Land::LAND_SIZE-1)
+                    indices.push_back(ESM::Land::LAND_SIZE*(col+outerStep-innerStep)+row+innerStep);
                 else
-                    indices.push_back(ESM::Land::LAND_SIZE*col+row+innerStep);
+                    indices.push_back(ESM::Land::LAND_SIZE*(col+outerStep)+row+innerStep);
+
                 for (size_t i = 0; i < outerStep; i += innerStep)
                 {
                     // Make sure not to touch the left or right edges
                     if (col+i == 0 || col+i == ESM::Land::LAND_SIZE-1-innerStep)
                         continue;
-                    indices.push_back(ESM::Land::LAND_SIZE*(col+outerStep)+row);
+                    indices.push_back(ESM::Land::LAND_SIZE*(col)+row);
                     indices.push_back(ESM::Land::LAND_SIZE*(col+i+innerStep)+row+innerStep);
                     indices.push_back(ESM::Land::LAND_SIZE*(col+i)+row+innerStep);
                 }
@@ -265,11 +275,11 @@ namespace Terrain
             {
                 indices.push_back(ESM::Land::LAND_SIZE*(col+outerStep)+row);
                 indices.push_back(ESM::Land::LAND_SIZE*col+row);
-                // Make sure not to touch the right edge
-                if (col+outerStep == ESM::Land::LAND_SIZE-1)
-                    indices.push_back(ESM::Land::LAND_SIZE*(col+outerStep-innerStep)+row-innerStep);
+                // Make sure not to touch the left edge
+                if (col == 0)
+                    indices.push_back(ESM::Land::LAND_SIZE*(col+innerStep)+row-innerStep);
                 else
-                    indices.push_back(ESM::Land::LAND_SIZE*(col+outerStep)+row-innerStep);
+                    indices.push_back(ESM::Land::LAND_SIZE*col+row-innerStep);
 
                 for (size_t i = 0; i < outerStep; i += innerStep)
                 {
@@ -278,7 +288,7 @@ namespace Terrain
                         continue;
                     indices.push_back(ESM::Land::LAND_SIZE*(col+i)+row-innerStep);
                     indices.push_back(ESM::Land::LAND_SIZE*(col+i+innerStep)+row-innerStep);
-                    indices.push_back(ESM::Land::LAND_SIZE*col+row);
+                    indices.push_back(ESM::Land::LAND_SIZE*(col+outerStep)+row);
                 }
             }
 
@@ -289,18 +299,18 @@ namespace Terrain
             {
                 indices.push_back(ESM::Land::LAND_SIZE*col+row+outerStep);
                 indices.push_back(ESM::Land::LAND_SIZE*col+row);
-                // Make sure not to touch the bottom edge
-                if (row == 0)
-                    indices.push_back(ESM::Land::LAND_SIZE*(col+innerStep)+row+innerStep);
+                // Make sure not to touch the top edge
+                if (row+outerStep == ESM::Land::LAND_SIZE-1)
+                    indices.push_back(ESM::Land::LAND_SIZE*(col+innerStep)+row+outerStep-innerStep);
                 else
-                    indices.push_back(ESM::Land::LAND_SIZE*(col+innerStep)+row);
+                    indices.push_back(ESM::Land::LAND_SIZE*(col+innerStep)+row+outerStep);
 
                 for (size_t i = 0; i < outerStep; i += innerStep)
                 {
                     // Make sure not to touch the top or bottom edges
                     if (row+i == 0 || row+i == ESM::Land::LAND_SIZE-1-innerStep)
                         continue;
-                    indices.push_back(ESM::Land::LAND_SIZE*col+row+outerStep);
+                    indices.push_back(ESM::Land::LAND_SIZE*col+row);
                     indices.push_back(ESM::Land::LAND_SIZE*(col+innerStep)+row+i);
                     indices.push_back(ESM::Land::LAND_SIZE*(col+innerStep)+row+i+innerStep);
                 }
@@ -313,18 +323,18 @@ namespace Terrain
             {
                 indices.push_back(ESM::Land::LAND_SIZE*col+row);
                 indices.push_back(ESM::Land::LAND_SIZE*col+row+outerStep);
-                // Make sure not to touch the top edge
-                if (row+outerStep == ESM::Land::LAND_SIZE-1)
-                    indices.push_back(ESM::Land::LAND_SIZE*(col-innerStep)+row+outerStep-innerStep);
+                // Make sure not to touch the bottom edge
+                if (row == 0)
+                    indices.push_back(ESM::Land::LAND_SIZE*(col-innerStep)+row+innerStep);
                 else
-                    indices.push_back(ESM::Land::LAND_SIZE*(col-innerStep)+row+outerStep);
+                    indices.push_back(ESM::Land::LAND_SIZE*(col-innerStep)+row);
 
                 for (size_t i = 0; i < outerStep; i += innerStep)
                 {
                     // Make sure not to touch the top or bottom edges
                     if (row+i == 0 || row+i == ESM::Land::LAND_SIZE-1-innerStep)
                         continue;
-                    indices.push_back(ESM::Land::LAND_SIZE*col+row);
+                    indices.push_back(ESM::Land::LAND_SIZE*col+row+outerStep);
                     indices.push_back(ESM::Land::LAND_SIZE*(col-innerStep)+row+i+innerStep);
                     indices.push_back(ESM::Land::LAND_SIZE*(col-innerStep)+row+i);
                 }
@@ -355,5 +365,10 @@ namespace Terrain
         mCompositeMapSceneMgr->clearScene();
     }
 
+    float Terrain::getHeightAt(const Ogre::Vector3 &worldPos)
+    {
+        return mStorage->getHeightAt(worldPos);
+    }
+
 
 }
diff --git a/components/terrain/terrain.hpp b/components/terrain/terrain.hpp
index 79e35fd8e..4844e0056 100644
--- a/components/terrain/terrain.hpp
+++ b/components/terrain/terrain.hpp
@@ -28,16 +28,25 @@ namespace Terrain
     {
     public:
         /// @note takes ownership of \a storage
-        Terrain(Ogre::SceneManager* sceneMgr, Storage* storage, int visiblityFlags);
+        /// @param sceneMgr scene manager to use
+        /// @param storage Storage instance to get terrain data from (heights, normals, colors, textures..)
+        /// @param visbilityFlags visibility flags for the created meshes
+        /// @param distantLand Whether to draw all of the terrain, or only a 3x3 grid around the camera.
+        ///         This is a temporary option until it can be streamlined.
+        /// @param shaders Whether to use splatting shader, or multi-pass fixed function splatting. Shader is usually
+        ///         faster so this is just here for compatibility.
+        Terrain(Ogre::SceneManager* sceneMgr, Storage* storage, int visiblityFlags, bool distantLand, bool shaders);
         ~Terrain();
 
+        bool getDistantLandEnabled() { return mDistantLand; }
+        bool getShadersEnabled() { return mShaders; }
+
+        float getHeightAt (const Ogre::Vector3& worldPos);
+
         /// Update chunk LODs according to this camera position
         /// @note Calling this method might lead to composite textures being rendered, so it is best
         /// not to call it when render commands are still queued, since that would cause a flush.
-        void update (Ogre::Camera* camera);
-
-        /// \todo
-        float getHeightAt (const Ogre::Vector3& worldPos) { return 0; }
+        void update (const Ogre::Vector3& cameraPos);
 
         /// Get the world bounding box of a chunk of terrain centered at \a center
         Ogre::AxisAlignedBox getWorldBoundingBox (const Ogre::Vector2& center);
@@ -63,6 +72,9 @@ namespace Terrain
         void enableSplattingShader(bool enabled);
 
     private:
+        bool mDistantLand;
+        bool mShaders;
+
         QuadTreeNode* mRootNode;
         Storage* mStorage;
 
diff --git a/files/materials/terrain.shader b/files/materials/terrain.shader
index 1f11217d2..dd016555f 100644
--- a/files/materials/terrain.shader
+++ b/files/materials/terrain.shader
@@ -160,6 +160,7 @@
         @shEndForeach
         lightResult.xyz += lightAmbient.xyz;
         lightResult.xyz *= colour.xyz;
+        directionalResult.xyz *= colour.xyz;
 
         @shPassthroughAssign(lightResult, lightResult);
         @shPassthroughAssign(directionalResult, directionalResult);
diff --git a/files/mygui/openmw_settings_window.layout b/files/mygui/openmw_settings_window.layout
index e4fc9f724..ebfaf678a 100644
--- a/files/mygui/openmw_settings_window.layout
+++ b/files/mygui/openmw_settings_window.layout
@@ -335,12 +335,12 @@
                                 </Widget>
                              </Widget>
 
-                            <Widget type="HBox" position="4 172 350 24">
-                                <Widget type="AutoSizedButton" skin="MW_Button" align="Left Top" name="ShadowsDebug"/>
+                             <Widget type="HBox" position="4 140 350 24">
+                                <Widget type="AutoSizedButton" skin="MW_Button" align="Left Top" name="TerrainShadows"/>
                                 <Widget type="AutoSizedTextBox" skin="SandText" align="Left Top">
-                                    <Property key="Caption" value="Debug overlay"/>
+                                    <Property key="Caption" value="Terrain shadows"/>
                                 </Widget>
-                            </Widget>
+                             </Widget>
 
                         </Widget>
 
diff --git a/files/settings-default.cfg b/files/settings-default.cfg
index ac56604d1..f191430df 100644
--- a/files/settings-default.cfg
+++ b/files/settings-default.cfg
@@ -80,6 +80,7 @@ texture size = 1024
 actor shadows = true
 misc shadows = true
 statics shadows = true
+terrain shadows = true
 
 # Fraction of the total shadow distance after which the shadow starts to fade out
 fade start = 0.8
@@ -125,8 +126,9 @@ fog start factor = 0.5
 fog end factor = 1.0
 
 [Terrain]
-# Max. number of lights that affect the terrain. Setting to 1 will only reflect sunlight
-num lights = 8
+distant land = false
+
+shader = true
 
 [Water]
 shader = true