Due - several years ago i put together a database of all the ortho-rectified quads covering Rhode Island - did some basic 'color matching' of the quads - keeping everything in a geotiff format.
Then I combined the public elevation datasets (different resolution) with that dataset - into one database.
Using "Global Mapper" (an EXCELLENT map tool - was around $200 at the time), it was possible to go to any location in Rhode Island at fairly high res (think it was all 1' res - may have been 2') - and display them in a '3-D' manner. It was a pretty neat little project - and went to some muckety-muck (friend of client) in the RI state government.
This was about the time that google was getting into 'mapping' in a big way - and slightly before 'google earth' came out - so, not quite cutting edge, but certainly on the 'leading implementation slope' for that type of tech.
Current Google result on Global Mapper - I can, and do, recommend this as a cost effective, and professional, tool. Much easier to use than ESRI - and a hell of a lot less expensive. The projection/coordinate transformation portions of the program alone cost over $1,000 from other vendors - and are not only robust, but also quick, efficient, and correctly done. (eg. UTM to State Plane Coordinate systems - or, datum transforms such as from NAD27 to WGS83 and such.) The incorporation of 3-D visualization was a neat addition to this fine little program. I am dated on it - about 4 years or so - but the basics of mapping do not change.
GPS Map Software - GIS Coordinator - 3D Mapping Program [Global ...
www.globalmapper.com/product/features.htm
GPS Map Software - Global Mapper is a comprehensive GIS coordinator and 3D ... accurate conversions between a large list of projection systems and datums. ... KML/KMZ (Google Earth) formats; InRoads ASCII format; Landmark Graphics .... Supports the easy creation of geological features, like strike-and-dip points, with ...