Ray tracing signed distance functions (sebastiansylvan.spaces.live.com)

A more compact variation of the signed distance function, but strictly to terrains is the inverted cone representation - e.g. if you can for every height maximally open an inverted cone, such that it does touch the neighbouring height cells, without going into the terrain, then you can use it for faster ray-casting.

One of the DX10/DX11 samples is using it.