And here's part three.
Trying to think of a good intro...
Failing. Let's just get on with it, shall we?
There are two types of obstacles in WarmaHordes, Obstacles, and Linear Obstacles. As the second type is actually a sub-group of the first, I will be referring to the first kins as non-linear Obstacles. There is no relation to terms for physics or narratology. M'kay?
Non-linear obstacles are any terrain pieces with steep, but not very high, sides. Hills that have near-vertical edges are frequent offenders, but slabs of stone, stepped pyramids or anything else steep and about an inch high works.
Of the two types of obstacle, the non-linear kind is by far the most disruptive. You cannot charge up an obstacle (without pathfinder or similar), it costs an inch to climb a level of an obstacle (regardless of pathfinder) and you cannot stand too far off the edge of an obstacle without falling off, getting hurt, and knocked down.
Apart from all this, many obstacles provide elevation, which gives a measure of protection and aids you in shooting over models. If you interpret the rules very literally, obstacles that grant cover (or concealment, though I can't really see a leafy non-linear obstacle...) will give a model on top a whooping +6 DEF (or +4) from anything shooting at it from a lower part of the field, as it will inevitably be between the two models' bases. We've decided locally this isn't the case.
Non-linear Obstacles are best used sparingly, for these very reasons. They obstruct movement without (generally, and barring multi-level features) blocking LOS, they provide significant benefits to anyone on top of or behind them. A few, well-placed, non-linear Obstacles can provide an extra layer of tactical challenge, but more than that they will quickly start dominating the game.
The other category of obstacle is the Linear one. These are all the narrow obstacles, like walls, fences and hedges, and there rules are a bit different.
First of all, Linear Obstacles don't impede movement nearly as much as the non-linear kind. There are two movement effects, however. First, you can't end your movement on a Linear Obstacle; you have to get entirely past. Second, you once again cannot charge across a Linear Obstacle without special rules. With proper placement, you can make it really tricky for people to get to within normal melee range, by not leaving enough space to place a model between your models and the Linear Obstacle, but still making sure the distance between your models and the other side of the Obstacle is more than .5".
So, Linear Obstacles have two purposes: to limit charge lanes, and to provide concealment or cover. They protect people.
However, placing too many Linear Obstacles can cause a lot of imbalance. For one thing, they don't actually block LOS, meaning they provide a relatively small surface area of anti-shooting/magic, as you only get the concealment/cover bonus if you're within 1" of the terrain piece. If you rely on Linear Obstacles to limit the impact of shooting, armies with a lot of shooting will have a field day, especially in the case of high-RAT shooters, and especially against low-DEF targets, as a few points of DEF will not be enough to protect the targets in these cases.
The second problem with too many Linear Obstacles is that armies that relly on charges (or combat in general) will be greatly impeded. Slow armies in particular might have trouble crossing obstacles to get into combat. A shooting unit behind a Linear Obstacle can be entirely inaccessible to close combat armies.
So, as usual, moderation is wise. Mixing different kinds of terrain gives the best field. The exact ratios are up for debate, but it's probably a good idea to include a few pieces that block LOS, a few that hinder movement, and a few that provide protection.
Privateer's main rules are unfortunately very vague on the matter of what terrain you should use, and the amount. So you'll have to make up your own minds.
Lazy writing, or leaving the players with maximum freedom?
And that's it for me.