I did not come up with this idea, but saw it on another model railroader's layout and loved the way it looked.  Since Bruce emailed me and asked me what I used to cover the hillside I thought I would share with others in case someone else finds it useful.

I start with some black poly fiber material which you can get from one of MRH's sponsors, Micro-Mark at:

http://www.micromark.com/blackandbrown-poly-fiber-12-oz-replaces-84152,9823.html   If you purchase anything from them be sure that you mention that you saw them on the MRH site.  Here's what the fiber looks like:

Since you stretch this stuff very thin a little goes a long way.  They also have it in green; however, I like the way the black looks as it gives more depth to the finished product.  I start by tearing off a piece and carefully pulling and pulling it until it is very thin.  Most of the "sheets" I make are approximately 3/4 of a square foot or around 12" x 8".  You can make any size you like but I find that this is a workable size.

After I've stretched is very thin I take it outside and spray the fiber with spray adhesive.  Just after spaying the adhesive I pour on a layer of fine ground foam which is a mixture of colors such as mostly medium green, some dark green, and some burnt grass.  I shake off the excess catching it for reuse.  I then turn over the fiber and repeat the process for the other side.

Next I spray the same piece with adhesive and add course ground foam that is a mixture of colors.  I repeat that process for the other side.  I continue to use the same process to add bigger and bigger pieces of ground foam including bushes and maybe a few sticks to represent dead tree limbs.  

Below is a picture of a completed piece.  Notice that you can see through it so make sure that the surface to which you apply it is painted a ground color.

This is the back side of the same piece:

This picture is an edge view so you can get an idea of the thickness.

To apply the poly fiber sections I use one of two methods: 1.) If I don't care about over spray I will you the spray adhesive and spray the land form.  I just cut the sections with scissors to the approximate size for the area.  Next I put the section in place and apply light pressure and I don't want to compress the fiber too much and lose the depth; or 2) If over spray is a problem I will coat the land form with tacky glue and then apply the fiber.  When applying additional sections I just place them on the land form and stretch the fiber until if fills any gaps.  In some cases where I've used different color blends of ground foam for adjoining pieces I just apply some ground foam across the two sections to blend them together.  

Here's that section by the pond that is covered on the hill with the poly fiber sections:

On Misti Mountain much of the ground cover was completed using the same poly fiber panels (outlined in yellow).  I did add some bigger clumps of ground foam once the fiber was applied to the layout.

Most all of the ground cover here is poly fiber.

One thing that I really like about using this method is I can make the poly fiber sections and "put them in stock".  When I need to cover a large area with a textured covering I can quickly take the sections from my stock and apply them to the layout.

Rick