BT will do the low poly stuff itself so no worries there. You just need to set the distance. It's a good idea to have at least 1 level even if it's out of sight as it still reduces the poly count automatically.
I use BT's GetTerrainHeight (or something like that) for ground collisions.
You can set up DBPro objects from BT and use them for collision detection too. I think you could use Sparky's Collision plug-in with it but I haven't tried that yet. I've a bit more work to do on it before I know for sure.
BT terrains are treated as normal dbp objects so they probably would take shader effects but I haven't done much work with shaders so not sure, but I think so.
I don't have the physics or occlusion plug-ins so can't comment on them.
The water planes and effects would have to be coded by you.
The water plane uses Evolved's Water Shader - quite famous on these boards - search for it, it's really rather good.
It's just the terrain that's being done by BT.
One other great think about BT is that it can render to multiple cameras without having to redraw all the terrain if the cameras are close together. This makes side-by-side 3D stuff real easy. See this vid for an example.
http://www.youtube.com/watch?v=VLmdXvGMRCg&feature=youtu.be
The parameter is incorrect error is caused by Win7 SP1 I believe and means that the code has to be compiled from within DarkBasic Pro to run.
You may need to install the free version to fix it.
I think there might be a demo of it on YouTube somewhere.