Hobbies
How to Make Mountains and Hills for Your Model Railroad by Doug Anderson
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Paint it with a water-based paint in shades of green (for grass) and brown (for dirt) and grey (for rock). You can also use spray paint, but make sure it is matte, not glossy, paint. While the paint is still wet, sprinkle some grass (available at the hobby shop) or green-coloured sawdust. When the paint is dry, add some lichen for bushes and trees (also available at any hobby shop).
Window Screening and Wooden Supports
If your train layout is permanent, a more durable method of making mountains and hills is to use screening and wooden supports. This also has the advantage that you can run tracks on the mountain itself, providing you make the appropriate supports. Basically, you cut wooden support blocks to the appropriate size, then drape window screening (called "fly screen" in Australia) over the blocks, stapling the screen to the blocks. You should fasten the blocks to the table with screws or nails first, so they don't move around.
If you want, you can build a second track bed around or through the mountain, elevated above the table. Simply use support blocks and plywood to make a rigid base for the track.
Once the screening is in place, pinch it in places to make rugged edges, ditches, and valleys. Then mix up some common household plaster (available at any hardware store to fix holes in a plaster wall) and slobber it over the screen. There is no need to be careful, just make sure all the screen is covered. A thicker plaster mix works much better than a thin mix, as the latter allows the screen to show through.