This 3-parts tutorial explains how to generate an island environment with Blender 2.6 and the ANT Landscape Generator, an add-on for Blender. Though not all of what is explained in the tutorial can be applied to Second Life, this tutorial is nonetheless useful to learn a number of techniques on how to model terrain with Blender.
This post by Lindal Kidd will explain how to adapt the shape of your parcel with the use of “terraforming”. This post is suitable to inexperienced users.
This post by Virtual Outworlding has a glossary of terms on how land is defined and an explanation on parcel and estate management tools. Check this out if you want to understand how the land system works in Second Life.
Nearly 3 hours in 14 videos, walking through the process of using Blender 3D to create low poly terrain object models. Click the link for the full article.