Terrains can be used in ArcGlobe as elevation layers, contributing to the definition of the globe surface.

For best quality display, you can do several things. Go to the Cache tab on the terrain’s Layer Properties dialog and uncheck the option to compress to 16 bits. This will eliminate the possibility of the surface geometry looking stair stepped when zoomed in very close. You can also set both the draped layers to use bilinear renderers. These will draw a smoother picture. Also, the hillshade raster should not use any stretch. The default using standard deviations is not appropriate for this data. As an alternative to viewing draped rasters derived from the terrain, you can add the terrain directly as a draped layer. To do this, open the TOC context menu, click Add Data>Add Draped Data, then choose the terrain.