I am no expert but this is the way I make my scenery using Nick Hod's free "AeroScenery" software.
The main panel I have marked with RED lines to indicate what you have to set up before downloading the images.
IMAGE SOURCES: ArcGIS, Bing or Google.
IMAGE DETAIL I do all my main scenery in 2.389 M/PIX (Airports or areas of interest you can remake in a different resolution)
CHOOSE FOR ME This is a very useful button and takes away all the guess work
Then select the three boxes, "Download Image Tiles", "Stitch Image Tiles" and "Generate AID/TMC Files"
Select your tiles to download. In size 9 I usually select 6 tiles as shown in the picture below and marked in red.
Now your OK to press the "START" button.
Once the download has completed you can view your stitched images in "Documents", "AeroScenery" "working" folder.
To make the scenery for FS 2 you now untick the 3 boxes and tick the "Run GeoConvert" and press the "START" button.
This takes about 60 to 90 minutes per tile.
When you are happy with the finished scenery you can delete all the other files leaving only the TTC to save space on your hard drive.
Editing the coastlines has already been covered in one of my earlier tutorials.