It is well known that terrain may vary markedly over small areas and that statistics used to characterise spatial variation in terrain may be valid only over small areas. In geostatistical terminology, a non-stationary approach may be considered more appropriate than a stationary approach. In many applications, local variation is not accounted for sufficiently. This paper assesses potential benefits in using non-stationary geostatistical approaches for interpolation and for the assessment of uncertainty in predictions with implications for sampling design. Two main non-stationary approaches are employed in this paper dealing with (1) change in the mean and (2) change in the variogram across the region of interest. The relevant approaches are (1) kriging with a trend model (KT) using the variogram of residuals from local drift and (2) locally-adaptive variogram KT, both applied to a sampled photogrammetrically derived digital terrain model (DTM). The fractal dimension estimated locally from the double-log variogram is also mapped to illustrate how spatial variation changes across the data set. It is demonstrated that estimation of the variogram of residuals from local drift is worthwhile in this case for the characterisation of spatial variation. In addition, KT is shown to be useful for the assessment of uncertainty in predictions. This is shown to be true even when the sample grid is dense as is usually the case for remotely-sensed data. In addition, both ordinary kriging (OK) and KT are shown to provide more accurate predictions than inverse distance weighted (IDW) interpolation, used for comparative purposes.