Hello! Well, completely unrealistic, frustrating terrain degeneration
torment me as well for a long time now, as I menage to fix it before... I remembered how to do it.
This is short tut:
1. You need Map Editor (it will do just fine with Warband just copy your map.txt into old M&B then copy back to warband when you finish editing)
2. Click on vertex mode
3. Select all vertex or dots by double click i think (use z mode)
4. Lower whole map height down and save
It is not perfect but it will generate more smooth battle terrain.