Fluxtah
My terrain engine, for a 1024x1024 heightmap, using 2 shaders, one for hi detail (6 alpha blended textures, base layer and lightmap) and one for low detail (1 texture stretched the entire terrain), I blend from hi detail shader and switch to low detail based on a certain distance, rather like the fog factor formula.
I use quadtree culling plus LOD switching algorithm.
My near and far planes are set to 1, 1000 respectively, so I see quite a lot of the terrain at one time unless I am looking at more of a downward angle.
I get average 100-150 FPS in windowed mode, I get 300-500 FPS (depending on how much visible terrain) in fullscreen mode.
If I move away from the terrain whilst still looking at it, where the LOD would be most coarse, I get 600+ FPS.
If I look at nothing, so everything is culled, I get 1000+ FPS.
I suck at artwork, and my engine is in its 'messy needs optimising and refactoring stage' but here is a screenshot I took of a 512x512 heightmap terrain http://geekswithblogs.net/images/geekswithblogs_net/fluxtah/6133/o_terra.jpg
I am not sure why you are getting such low FPS, but I do not think your test is giving accurate results.
Also GFX cards are optimised to render large batches of geometry with as less draw calls rather than small batches with many draw calls, I doubt this is the problem though.