Lightmaps
You can create and use a Lightmap, based on the Lights in your Scene. You should almost always use Lightmaps. A Lightmapped terrain looks substantially better than Vertex lit. On top of that a Lightmapped terrain also runs faster than a Vertex lit terrain!
A mountain view without a Lightmap
The same mountain, now using a Lightmap. Much better!
Creating a Lightmap
To create a Lightmap, make sure you have at least one Directional Light in your scene. Then choose from the menu. Here you can set various options like the Resolution of the Lightmap, choose the Lights used in the Lightmap, Shadows, and Shadow Sampling.
Toggling Lightmap
To enable or disable the active Lightmap, select your Terrain and click the Terrain Settings tab. In Lighting popup, choose Lightmap or Pixel lighting mode.
Note: You must use a Directional Light to create the lightmap. Point and Spot Lights will not be taken into account when creating the lightmap.
