Here is the program I used to convert from jpeg to 16bit .raw:

• ImageJ http://rsbweb.nih.gov/ij/download.html

It's a nifty little opensource java utility. Just create your heightmap in gimp as a greyscale and save it, then open it in ImageJ, use the menu to make it 16bit, tweak it a little bit and then save as Raw Data. Make sure its 1024x1024 and follow the naming conventions.
I wish someone just told me this earlier. The official GECK website claims that ImageJ can only import .raw files. But it can do more! It can export to!

I think the quality standards of Fallout 3 mods would be a lot higher if there was more in depth and accessable educational material out there. I just want to help people to invest their time in making content for their mods, instead of spending it reverse engineering features when Bethesda should have been more responsible and better instructed the moding community.

yeah