The 3D shapes are done in light wave. They are very rough indeed just boxes with pointy roofs. I made about 20 or so the bunched them together then bunched the bunches etc and filled in holes until I had a large area. Then I export the height map of that. To that I tried using blender again but that program is still going downhill in my opinion. Eventually it crashed so I did it in light wave again and it was fine. Blender has a render ortho mode which is better than light waves but the mode is so damned annoying in its parameters that I lost my rag in the end. In both apps to get the height map you render black mist or black fog linear over the 3D object with mist starting at min Z and ending at max Z. To make it seamless I do in 3D what I do in 2D for my seamless tiles tut. It mentions in there that I got the original concept for that from a guy doing the tiling for paving slabs in 3D.
From there I used my GTS prog and run the thatching script over it. Now RobA has tried pertty successfully to do this with Gimp and its all in the thread Thatching for Dummies.
I was just going to drag street lines through it and any building that was partially cut I was going to erase in the same mask then fill in any obvious blank areas with market stalls, crates, a well or some other city furniture. I know its all a botch up but there has to be an easier way to make cities than by placing each house down individually. Whats really needed though I haven't the time to do it is to make a program where it places house 3D models down into areas marked out with a mask so that you draw the city and the house areas and then it fills those areas up with packed in houses. Then render that with the thatch and so on. This is all fairly experimental but I think its better than the patterns done via Voronoi that was used with Gimp/PS etc.