This would be one of the first levels I've ever worked on using all my own assets in UDK. I needed to create the terrain of my level based on the top down concept map I'd made, so I decided to create it in UDK. To help me do this I followed a tutorial by Digital Tutors on creating maps for MMOs but adapted it to suit my purpose.
One technical issue that must be adhered to, whilst starting a landscape in UDK, are the map sizes that UDK uses. This handy table helps insure the map you create conforms to those constraints.
Whilst in UDK with the landscape edit tool enabled and the desired map size created as a plane in the viewport, you can use a tablet to paint the landscape. Building up forms with the additive brush and the clay tool enabled, it's very quick to sketch out mountains and plains. You can flatten, and smooth areas where required with the respective brushes, and to finish chisel ravines and erosion into the landscape with the erosion tools.