Is there any other way to generate a route in Zusi or is DEM usage the only method available?
First we have to distinguish track laying from terraforming. It's a bit like a model railway. First you do the track laying, with the assistance of the route editor and possibly my little "Track Surveyor". The latter requires accurate topo maps from which you can peg out the route and then lay the track to fit the peg line while adhering to railway construction standards, like proper transition curves.
After that you add trackside features like embankments or cuttings, tunnels, bridges, station platforms etc.
The last step is terraforming itself with several options.
The route editor offers basic capabilities and will create a plain terrain around your track layout. You can manually modify this terrain to a certain extent to create hills and valleys.
Another option is to use a DEM of some kind. This will bring my "Terrain Shaper" into the the game.
For modeling a mainly flat scenery this tool can create a DEM on the fly taking the track layout and deriving elevations from that.
This may do for Sydney suburbia but won't be appropriate for the Blue Mountains. There we presumably want a proper DEM. There are quite a few routes in Zusi which are based on real DEMs, the Demo is one. (The Demo and others were also built with the "Track Surveyor".)
How do we obtain a DEM? First choice will be looking for available ASTER DEMs. These are satellite data, in a 30m grid, currently free of charge, and will be created for all continents (hopefully).
However, most of them need a little post processing. They often only provide relative elevations and need ground control points to adjust these. There may also be artefacts which need to be eliminated, or holes (clouds, water surfaces) to be filled. I am currently working on my next tool which will assist in this post processing.
And then there is always the option of hand crafting the DEM based on contour lines. I am currently aware of two tools, TSTF and TSTools, which support this approach. You need to trace the contour lines from a topo map, the tool will create the DEM. I am planning to offer this approach for my new tool as well.
Finally there are some expensive commercial tools around which automate the process of contour line tracing and the "Blackart" project by John Childs.
(This has been a little advertising for my tools, I hope you don't mind. The tools can be found on the Zusi CD, awaiting translation).