Here is a fix I found on the Trainz Forum about building a route through a tight canyon with a river on the side.
Pretty easy when going straight, but the curves present a problem. No matter how careful I am, when I do a test run, I always find places where the cliff face goes under the track creating a bump. Well, tonight, I found out how to fix that. Once you have laid your track, raised your cliff face, and lowered your river, click on the track tab, then the advanced tab, and in the upper right hand corner, click on the smooth terrain button.
It's the one that looks like a movie studio's clap board. Then just click between each spline, and viola, instant smooth.