How to make a displacement
Displacements are fairly easy to make, so here is a quick step-by-step guide to make a displacement.
Step 1: Make a brush
Get out your brush tool and draw out your brush in the 2d views, and press enter. Put the top of the brush where you want your displacement to be. (or in the case of cliffs, the side) Your brush should be a cube/block, as displacements must have 4 sides.
Step 2: Texture your brush
Select your brush, and click the texture application tool.
Hold ctrl, and click the top side (the one that will be the displacement plane). You should have 5 of the 6 sides selected. Now, in the texture application window, click browse. Select the nodraw texture, and click ok and apply.
Now, select the top face. Displacements can use normal textrures like everything else, but they have special textures made especially for them. They are 'blend' textures - to find them filter for 'blend' in the material browser. Pick one and apply it - I'll pick blendgrassdirt001a. Keep the texture application window open and your newly textured displacement plane selected.
NOTE: Avoid texturing non-displacements with 'blend' textures, Valve are, apparently, removing support for this soon.
Step 3: Create your displacement
In the texture application window, there is a displacement tab. Click it. This is your main window for displacement-ing.
Click the 'Create' button (you still only have the top face of your brush selected) and in the box that pops up, pick 3. This is the largest grid size. 3 is medium, and 4 is smallest. Avoid using 4 on small faces.
Click ok in the box and you will see two things happen:
1. Lines form on your top plane
2. The 5 NODRAW faces disappear!
Try looking at your displacement from the back in the 3d view. Its gone! As said before, displacements can only be seen from one side.
Step 4: Manipulation
With the displacement window still open, select the 'Paint Geometry' button. The new window that opens up lets you raise and lower points in the displacements.
Have a muck around with this until your displacement looks nice and curvy. NOTE: The 'distance' and 'radius' lets you change the amount of effect the tool has. Turn radius up to move more points on the displacement, and put distance up to move the points faster. Left click to raise a point, right click to lower.
Now close the window and choose the 'Paint Alpha' button. This new window lets you manipulate the texture on the displacement.
Remember when you picked the 'blend' texture for the displacement before? Well, the blend texture actually contains two textures which slowly blend into each other. The paint alpha feature lets you make patches of dirt in your grass, for example. Also, a lot of blend textures automatically insert random grass sprites onto the places of the displacement painted with alpha. Its really handy. Make some of your displacement alpha, just for fun. The paint alpha window works exactly like the paint geometry window. ('Value' is the speed of change from one texture to another)
Thanks Hope It Helped
Tut From TWHL.co.za
Pros: Its very useful (of course it is, these are displacements!!), and.... huh, almost everything is good!
Cons: You could use some HTML
Improvements: HTML. Even basics like bold text would be very nice.
Notes: <3 you
I've already covered this topic and with greater detail and images, also there are a few other short tutorials available on the site with the same information you've provided as well. I'm not disaproving because you did put effort into this, I just wanted to let you know.
Displacements - Blend - Sewing and minor Subdiv