http://www.youtube.com/watch?v=mIsaATIedtI
I made a video that shows how I like to do it. One important thing is that in my video, I first smoothed the terrain. You could select all the faces and edges and open the "Soften/Smooth" Dialog window and move the slide until all edges appear to disappear and the tarrain looks smooth.
Then just do like the video shows. Its a good quick method to get paths onto terrains.
Chris