Sorry I didn't explain correctly:
I rise the height of the first tile (a square with 4 vertex) in the x0, y0 corner in the map, so in the game the terrain should look flat, with the fist tile rised.
But it dosn't :( Eg: Just the fisrt vertex rises, or the first and second, etc. So as you say, the game is doing something we're missing, with the height info, before using it on the mesh.
Here's what happens: 4 vertex rised in 3dstudio, but just 1 vertex rised ingame.
About the source mesh in 3dstudio: is a big flat plane, divided in little square tiles, each tile is formed by 4 vertex and 2 triangle faces.
In your picture, your coef seems to low, in my picture the mountains are higher (I used coef 0.03, the more you use, the higher difference in altitudes.
Edit:
See the blacksmith here is not in a mountain.
I've included a pic of my source mesh, the first tile, 4 yellow vertex, 2 red faces (only one is selected).
And the blue lines are 'edges', the whole plane has 512x512 edges.
If I translate that to the game, it shows just the first vertex (index 0), rised just a little.
Anyway, in 3dsmax Im using 'max units' which might be different to shaiya-units. Actually I don't know "what are shaiya units", pixels? metters? something else?
And TBH is a little hard to model a full terrain in 3dstudio (at least in the old version 2010). I remember Unity3D had better tools to do that.
I still can't find a correct way to export UV coordinates in my smod script, the textures look all messed up in game.