You could use Particle System with Clouds texture (or any texture, even hand painted) to do this.
Steps:
Add Particle System to your terrain (and set it as screenshot below shows).
Add texture to this Particle System.
Go to Texture tab, select created texture (and set it as screenshot below shows).
Settings:
Blend file:
http://blend-exchange.giantcowfilms.com/embedImage.png?bid=1858
Update:
To add custom generation of trees you need to create New Texture, then in Texture Paint Mode create Material (Material Diffuse Color) and choose it in Texture tab. Now you can paint wherever you want.