The q3 engine was really not designed to do outdoors, but a few changes they put into team arena, like expanding the max size for maps, means you can do some ok outdoor areas - BUT - if you're making it for tremulous, wont an outdoor island be too big for gameplay reasons anyway?
Generally speaking, the best way to do terrain is with brushwork, use the gensurf plugin in radiant - it works. Problem is terrain surfaces don't bsp or vis well, so you should make your terrain as detail brushes, or your map will take days to compile.
A whole island of detail brushes is about the least efficient thing you can throw at a bsp based engine though. You should really plan out your level t oeither embed some caulk occluders under the ground level, or change a few high ridges of terrains back to structural brushes where possible.
A usefull worldspawn key to look at is _farplanedist