First make a heightmap and save it as a .tga. Then use the tool to get the resulting .w3e. Import it into your map using an MPQ editor, replacing the old .w3e file. As far as I know, that is how it should work. However, I never tested it myself.
That tool is very old, so I am not sure if still works. Check if the output .w3e file has any data at all. (open it in something like notepad) Make sure your editor is closed as well when you are editing the MPQ of it.