Terrain refers to the environment you do combat in. For campaign missions, both type and layout are preset, while for multiplayer, the type is random and the layout is procedurally generated.
Anything that is not a Ship is Terrain.
There are two basic types of terrain: The destructible and the indestructible.
The most common type, it cannot be damaged or moved. Colliding with indestructible terrain will deal damage depending on your mass and velocity, although it can be mitigated by several abilities. Your ship will also bounce back at a tiny fraction of its original speed. Thrusting into it will deal constant damage over time.
Indestrucible Terrain can not be teleported through using any ability except Plexonic Absorption Portal.
This is the type that Crates and Trash are made of. You can attack and destroy it, or grapple and toss it around the map. Colliding with it will deal damage just like with indestructible terrain, but will also push the object away.
When destroyed, it has a chance of yielding powerups. Crates have 100% of dropping one, all others have less.
- yawn* I'll do those later.