The combination of high density elevation data (120m) with the auto generated trees and buildings, plus shadows from the clouds and shadows calculated on from the interaction of terrain and the sun... all these factors combine to create the most convincing effect of flying over real terrain I've yet experienced.
Firepower for Microsoft Combat Flight Sim 3: Development
Video promoting the "Firepower" demo, includes the Messerschmidt 410-B. Includes interesting insight into the processes of developing these sims and interviews with B-17 pilots.