The designer's own favoured method is to firstly decide which table edges the armies will start from. Then each player rolls a D6 and the highest scorer starts to place scenery first. To generate a piece of scenery roll 2D6 and consult the Terrain Generator Table. The player can either place that piece of scenery or 'pass' and place no scenery at all if he prefers. Unless he passes the player places the scenery somewhere on his own side of the table. Scenery is not placed on the other player's side of the table unless it is a plain hill, in which case it can be placed straddling the dividing line.
Each player continues to lay down scenery one item at a time. Once there is one river or stream on the tabletop any further river/stream results are re-rolled as it would obviously be inconvenient to have a battlefield criss-crossed with rivers! One type of scenery can be placed over another where appropriate, say wooded hills or hillsides with walls.
Once each player has placed at least one piece, either player may declare he is satisfied with the scenery as it is instead of placing a further piece. The other player then has the option of generating and placing one more piece if he wishes. The battlefield is then complete!
If both players are in agreement scenery can now be moved around or removed if it is felt a better battle will result. For example, you might allow your opponent to remove a wood from his side of the table if he lets you reposition a hill.
Remember the objective of setting up terrain is to provide an interesting and entertaining battle, not to impede movement to the extent where armies are unable to get to grips. If neither player is satisfied with the terrain once it has been generated then start again! We have not defined the size of hills or woods, as we assume players are going to use scenery they have made themselves. Obviously it would be silly for a wood to extend over the whole table! As a general rule no terrain feature may be bigger than 12" across, whilst a wood or hill of about 8" diameter would be more typical.