You could use EntityPickMode, then convert the picked x/y/z coordinate to the terrain using TFormPoint:
; TerrainHeight Example
; ---------------------
Graphics3D 640,480
SetBuffer BackBuffer()
terra_size=32 ; initial size of terrain, and no. of grids segments, along each side
x_scale=10 ; x scale of terrain
y_scale=50 ; y scale of terrain
z_scale=10 ; z scale of terrain
marker_x=terra_size/2 ; initial x position of marker
marker_z=terra_size/2 ; initial z position of marker
camera=CreateCamera()
PositionEntity camera,(terra_size*x_scale)/2,50,0 ; position wherever; just try and get good view of terrain!
RotateEntity camera,30,0,0 ; again, try and get good view of terrain
light=CreateLight()
RotateEntity light,90,0,0
; Create terrain
terra=CreateTerrain(terra_size)
ScaleEntity terra,x_scale,y_scale,z_scale
; Texture terrain
grass_tex=CreateTexture(64,64,1+8);LoadTexture("media/mossyground.bmp")
Rect 0,0,64,64,0
CopyRect 0, 0,64,64,0,0,BackBuffer(),TextureBuffer(Grass_tex)
EntityTexture terra,grass_tex
; Create marker
marker=CreateSphere()
ScaleEntity marker,1,1,1
EntityColor marker,255,0,0
EntityPickMode terra, 2
While Not KeyDown(1)
; Change marker position values depending on cursor key pressed
If KeyHit(205)=True Then marker_x=marker_x+1
If KeyHit(203)=True Then marker_x=marker_x-1
If KeyHit(208)=True Then marker_z=marker_z-1
If KeyHit(200)=True Then marker_z=marker_z+1
; Get terrain height at marker position
marker_y#=TerrainHeight(terra,marker_x,marker_z)
; If A pressed then increase marker_y value and modify terrain
If KeyDown(30)=True
If marker_y#<1 Then marker_y#=marker_y#+0.005
ModifyTerrain terra,marker_x,marker_z,marker_y#
EndIf
; If Z pressed then decrease marker_y value and modify terrain
If KeyDown(44)=True
If marker_y#>0 Then marker_y#=marker_y#-0.005
ModifyTerrain terra,marker_x,marker_z,marker_y#
EndIf
; Position marker, taking into account x, y and z scales of terrain
PositionEntity marker,marker_x*x_scale,marker_y#*y_scale,marker_z*z_scale
RenderWorld
Text 0,20,"Press A or Z to alter height of terrain at marker's position"
Text 0,40,"Value: "+marker_y#
Text 0,80,"TerrainHeight: " + TerrainHeight(terra,marker_x, marker_z)*y_scale
Text 0,60,"Terrain Y: "+TerrainY(terra,marker_x*x_scale,marker_y#*y_scale,marker_z*z_scale)
CameraPick camera, MouseX(), MouseY()
TFormPoint PickedX(), PickedY(), PickedZ(), 0, terra
marker_x = Int(TFormedX())
marker_z = Int(TFormedZ())
Flip
Wend
End