Well, I tried this last night. I took 9 terradons in a big unit, and it was against High elves in a 2000 point game. I'll tell you why it went wrong, and I recommend doing what Skrox suggested.
My opponent had a geared lord on a star dragon, which was where a lot of his points went. He had 4 units of 10 archers, a chariot, 2 bolt throwers, and only one block of infantry - Phoenix guard with horrible 4+ ward saves. This is where the problem was, I didnt want to risk most of the terradons dying to his missile fire, so I kept them back until they were within range of the only unit worth dropping their rocks on - the phoenix guard. This meant that his bolt throwers and archers had no pressure on them and were able to casually decimate my numerous skink skirmisher units. When my Terradons did drop rocks on the phoenix guard I think I got 14 hits, which is slightly below average. With their ward saves and some lucky rollling on my opponents part only 4 of the guard went down, and my terradons were now left in a horrible mid-table position. (for anyone interested in the result of the battle - Elves scored a minor victory, but another turn or two and it would have been a lot worse for the lizzies).
So heres my 2 cents on large terradon units - Maybe they could be viable given the right opponent, preferably one with lots of viable targets so that the terradons can pick on the one which leaves them in a decent place at the end of the movement phase. But I think generally it's a much better option to take several smaller units, with their fly move you can still orchestrate a large bombardment anyway, but you also don't loose the versatility which terradons rely upon to justify their points cost.
Maybe it could be made to work with the correct mixture of heores/magic items, but I don't think I'll be trying to get the formula right.
