Is it possible to get effects like bump-mapping or specular lighting on the surface of a terrain? The built options for the terrain only seems to allow a set of diffuse textures.
Official answer: no.
Unofficial, and more importantly, unsupported answer: it should actually be possible to override the built-in terrain shaders with your own: Download the built-in shaders, and add the Terrain splat shaders to your project, and change them as you like. However, we may at some point in the future decide to change how the shaders in the terrain engine are used - this would break any web players trying to replace them in this matter.
Yes with Unity 4+.
Custom shader and material on terrain.
Here is tutorial with mixed global and local normal map: