[DustyPorViva]

You can use any tileset you'd like, you set the tileset via script, so the terrain generator has no control over that. Yes, you should use the format of picso, but you could technically make a flat gmap, use a pics1 or variation of it, and manually alter the terrain via tileeditor.
As for making your own, you can do that by just editing the height's yourself(click on the intersection of the lines and drag up/down, if I remember rightly).