I just fixed the nbproject path (well, without using Netbeans). Actually the two jars from the misc folder are obsolete now and can be removed. Doesn't Netbeans complain about that? I will commit the changes later. You seem to have it running, don't you?
I set sith up as a "freeform" project with existing ant script, so netbeans just references the ant build-file and the jars in the project config are only used for code completion. A "real" netbeans project detects missing jars and such.
Deformable Terrain? Don't know. Mathias is working on a new Terrain implementation. I don't know, if he already came to that point. Let's wait for his statement.
You should be able to change the terrain data on runtime, but the used strategy is not best suited for terrain deformation, because it needs precomputation of the LOD levels and the complete subgrid has to be re-uploaded to the gfx card on a change.