Actually, I think it can be somehow improved both in lines of code and actual performances, so feel free to edit or tell me “you’d better to do that this other way…”

What’s going on is:

• generate a shape filled with a gradient to create a reference color for differents “height”
• generate a perlinNoise everyframe for dataprovider use
• detect each perlinNoise pixel depth according with its main channel value (blue in this case..)
• generating a vector of Bitmaps to be employed in the view

/**
 * 25-Line ActionScript Contest Entry
 *
 * Project: Random Terrain 3D Generator
 * Author:  Piergiorgio Niero (aka pigiuz) piergiorgio.niero[at]gmail.com
 * Date:    11/24/08
 *
 * Permission is hereby granted, free of charge, to any person obtaining a copy
 * of this software and associated documentation files (the "Software"), to deal
 * in the Software without restriction, including without limitation the rights
 * to use, copy, modify, merge, publish, distribute, sublicense, and/or sell
 * copies of the Software, and to permit persons to whom the Software is
 * furnished to do so, subject to the following conditions:
 *
 * The above copyright notice and this permission notice shall be included in
 * all copies or substantial portions of the Software.
 *
 * THE SOFTWARE IS PROVIDED "AS IS", WITHOUT WARRANTY OF ANY KIND, EXPRESS OR
 * IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY,
 * FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. IN NO EVENT SHALL THE
 * AUTHORS OR COPYRIGHT HOLDERS BE LIABLE FOR ANY CLAIM, DAMAGES OR OTHER
 * LIABILITY, WHETHER IN AN ACTION OF CONTRACT, TORT OR OTHERWISE, ARISING FROM,
 * OUT OF OR IN CONNECTION WITH THE SOFTWARE OR THE USE OR OTHER DEALINGS IN
 * THE SOFTWARE.
 */

// 3 free lines! Alter the parameters of the following lines or remove them.
// Do not substitute other code for the three lines in this section
[SWF(width=800, height=800, backgroundColor=0xffffff, frameRate=24)]
stage.align = StageAlign.TOP_LEFT;
stage.scaleMode = StageScaleMode.NO_SCALE;
// 25 lines begins here!
var _bd:BitmapData = new BitmapData(50,50,false,0x0000FF);
var _points:Array = new Array(new Point());
var _vxCont:Sprite = Sprite(addChild(new Sprite));
_vxCont.x = _vxCont.y = 400;
var _vexels:Vector. = new Vector.((2500),true);
var _hMap:BitmapData = new BitmapData(255,1,false);
var _gradient:Shape = new Shape();
_gradient.graphics.beginGradientFill( GradientType.LINEAR,new Array( 0x4267F9, 0xF9EAB0, 0x9EF07D, 0x8DF273, 0x9D5E1E, 0xFFFFFF ),new Array( 1, 1, 1, 1, 1, 1 ),new Array( 90, 105, 110, 120, 145, 185 ),new Matrix(0.2456396484375,0,0,0.0006103524625,127.5,.5));
_gradient.graphics.drawRect(0,0,255,1);
_hMap.draw(_gradient);
addEventListener(Event.ENTER_FRAME,generatePerlinNoise);
function generatePerlinNoise(e:Event=null):void{
	_bd.perlinNoise(25,25,1,0,false,true,4,false,_points);
	Point(_points[0]).y+=1;
	for(var v:uint=0;v<(2500);v++){
		_vexels[v] = (_vexels[v]==null)?generateVoxel(v):_vexels[v];
		_vexels[v].y = Math.pow((_bd.getPixel(v%50,Math.floor((v/50))) & 0xFF)/255*6,3)*24*.24;
		_vxCont.rotationX = mouseY*.1;
		_vxCont.rotationY = (_vxCont.rotationY-(90/stage.stageWidth*(mouseX-stage.stageWidth)+45))*.5;
		_vexels[v].bitmapData.floodFill(0,0,_hMap.getPixel(255-(_bd.getPixel(v%50,Math.floor((v/50))) & 0xFF),0));}}
function generateVoxel(v:uint):Bitmap{
	var b:Bitmap = new Bitmap(new BitmapData(24*.5,24*.5,false,0x000000),"auto",false);
	b.x = v%50*24-(_bd.width*24*.5);
	b.z = Math.floor((v/50))*24-(_bd.height*24*.5);
	return Bitmap(_vxCont.addChild(b));}
// 25 lines ends here!

enjoy