With matrices, I would just make a dummy cube, hide it, then position it at each vertex (each tiles top left corner). Then by storing the X and Y value when you click on one of those corners, you can have the height adjust based on vertical mouse movement. That's what I did with OIE, along with some smoothing functions, and allowing number key height setting. For example, I would have the '1' key, set the current matrix node height to -100, '2' would be 0, '3' would be 100, '4' would be 200 etc etc. This makes it pretty quick to work with. Rather than adjusting each and every height of all those nodes, I'd zip through, setting heights with the number key, drawing little rivers etc - then smooth the whole thing out.
In the actual game, I made memblock meshes instead of using a matrix, which allowed colouring, manual lighting and better performance.
One neat option is to draw all the nodes, but also keep track of the node closest to the mouse pointer - then you have an even quicker matrix editor, because your not having to select nodes or check for ranges.

Health, Ammo, and bacon and eggs!
