There is much to say on layer standards. The nutshell version...
Model layers are typically organized by discipline and element type. In the US we usually use some variation on the National CAD Standards (NCS) so layer names would be something like:
A-CLNG, A-FLOR, A-WALL
C-SITE
I-FURN
S-BEAM, S-COLS
Where A, C, I and S stand for Architecture, Civil, Interiors and Structure
The general rule with model layers is to combine elements that appear together (such as interior walls) and separate elements that appear together or separately in various (layer) combinations.
The other general rule with all layer names is to be self explanatory. It is easiest to instruct people to put walls on the A-WALL layer, lighting on the E-LTNG layer, and so on. Sometimes this means creating a few extra layers for things that are always on or off together as might be true for ceilings, lights and diffusers for example. It is also hard to anticipate these things so it is usually best to be somewhere between Spartan and Dionysian in the use of layers.
The other primary type of layer is for annotations. I make a strict rule of separating the model elements (what will be built) from the annotations (instructions for building it). The NCS standard is to use the abbreviation ANNO after the discipline code (eg A-ANNO). I often prefer to separate the annotation layers entirely by using a "+" at the start of the layer name (and thus skip the "ANNO" part).
In general you only need one annotation layer for each discipline but you may also need different ones for different scales in plan since these will have to be overlaid in the plan view (unless you use the Worksheet tool for enlarged plans - which I would do were it not such a pain to work in a 2D proxy).
There are other minor layer types such as: the SEO layer (or layers?) on which solid operators can be hidden, LINK layers for hotlink management, TEMP layers (which I usually precede with a "!" to put them at the top of the list) for various purposes, and so on.
So the short answer is, yes put the terrain on a separate layer.
