You will browse to the terrain data and preview it in ArcCatalog.

The Navigate tool is active when you first preview data in 3D. You can see the names of tools by hovering the pointer over the tool. The Navigate tool allows you to rotate 3D data and change the apparent viewer height by clicking and dragging left and right and up and down, respectively, in the 3D preview.

The Navigate tool also allows you to zoom in and out and pan across the data, depending on the mouse button that you click while dragging in the 3D preview.