You can easily handle elevation much larger than RAM, and imagery larger than texture RAM, by using tilesets. VTBuilder is the easiest way to create tilesets, and libMini is used directly by vtlib to render them.
Tilesets can get extremely large on disk, which makes them
difficult to move around.
You can reduce this greatly with compression, both by using texture compression for imagery (e.g. DXT) and/or further compressing with common archival tools like 7zip.
Example: a 2.4 GB imagery tileset
|300.3||12.5%||DXT1 (1/8 size of uncompressed)|
|139.0||5.8%||DXT1 and then 7zip|