It is quite hard to make a smooth transition from hades to grass, but this perfectly resembles the way it is in real-life. After a forest fire, very often there is a clear line that shows you "the fire got here and not any further". Ditto with volcanoes.
Of course, after a forest fire, the wind can blow some burnt pieces of wood onto the un-burnt grass, and on a volcano, some burnt stuff can role down the slope. But these effects can be achieved in AoM by using objects, not terrains. The terrains itself remain clearly separated.
I must say you didn't do a bad job with that screenshot, but to resemble the effects of wind or roling rocks as described above: place some burnt objects on the unburnt terrain and vice versa. Use the different rock types, grass, bush, tilted trees and - in case it was a civilised area - use some barrels, broken fences, and destroyed buildings.
(And about the terrains itself, you could try to use some underwater terrains, but it really isn't necessary for a good transition).
[This message has been edited by Archaeopterix (edited 04-28-2005 @ 10:13 AM).]