Enter plaster. It was cheap and relatively not toxic (I wouldn't make a milkshake out of it, though). I already had some cheap trees, large washers, and I stole some aluminum foil from my wife. The plaster was my only real cost, which was about $13 on Target.com (Bonus fact: Target also exists in Australia with the same branding but is a totally different company. I'm speaking here about the USA Target. If you're down under, I can't guarantee you'll find plaster there).
For my first test, I made a cup out of aluminum foil, placed a washer at the bottom, and dumped in a little of the powder plaster. Taking some water, I poured it over the evil white mixture until it was soupy. I then placed a tree in the white goop, folding up the foil so it supported the tree while it dried. You can see how the base came out a little misshapen. Fortunately, plaster can be broken with a fair amount of force. I just chipped away at the base until it looked OK.
After I was satisfied with the result I painted the base with some paint, also from Target. I could have used my nice Vallejo but I didn't want to waste expensive paint on mere terrain. Judge away on my wargaming snobiness.
Satisfied with doing just a tree, I wanted to do something bigger. I used an old tupperware container and crumbled up some aluminum foil for a mold. I did go a bit overboard and I couldn't unravel the foil ball without breaking it. Rolling up another sheet with a bit less enthusiasm, I created a crinkled surface that would reflect the rough terrain of a small hill. Putting the foil in my container, I put in about eight plastic spoonfuls of plaster and enough water to make a soupy mess. I can't really say how much I put in since I didn't want to use any of the wife's nice measuring spoons. Although plaster is not really toxic it wasn't something I wanted to mess with.
In this picture you can see a nail that I stuck into the plaster. My thought here was that I can pull out the nail and have a nice hole for a tree. My fear was that if I drilled into the plaster it would crack and break
Finally, when it was dry I glued a tree in the hole with the nail. I just used some good ol'PVC glue. The nail came out OK, although I feared I would crack the plaster the entire time. The other tree is held up with some wall filler. The second tree was kind of a last minute thing, and I just created a little filler pyramid and shoved the tree in.
Some more of the same cheap paint later and you can see it turned out pretty good. If I felt more motivated, I would probably used some wash and dry brush on the raised areas. Maybe even glue some rocks or flock on top. All in all using the plaster was a good experience. I am certainly going to do it again. There were some drawbacks, though. One thing I didn't account for is how messy it can be -- like glitter, the powder gets everywhere on your workspace. Plaster isn't the strongest stuff in the world either. If you drop this on a hard floor, it will shatter. Shatter into a lot of annoying white pieces, that is. Also, DO NOT POUR LIQUID PLASTER DOWN THE DRAIN! Seriously, don't. If you do it will harden in your pipes and your local plumbers will dance in the streets at their newfound good fortune. I didn't make this mistake but warnings abound on the package. I give it two plaster-powder covered thumbs up. If you can tolerate the drawbacks and don't pour it down your drains, it allows for great amount of creative flexibility at a reasonable price.