how big should my level be... technically?

Without using the terrain engine, could i have a heightmapped subdivided quad of X polys that is really really high (ie 50,000) with mountains and such. could i have 4 of these to make the level bigger?

would using the terrain engine give me more benifits in terms of performance (even though i use my own trees and such).

What is suggested on poly count for a level? should i scale down my objects appropriately rather than scaling up my level?

You should scale the objects down rather than making them bigger. It would run much better.