END OF AN ERA, FRACTALFORUMS.COM IS CONTINUED ON FRACTALFORUMS.ORG

1. Take a flat triangle,
2. Stick a vertex half-way down each edge, creating a mesh with 4 times as many triangles.
3. Offset these new vertices by random(-k, k) vertically, where k is proportional to the horizontal length of the line that it sits on.
4. Goto 2

Where I learned to make fractal mountains: http://www.gameprogrammer.com/fractal.html

The Square Diamond method mentioned there is very similar to what you showed but starts with a square instead. See how it turned out here: http://alexsimes.com/MountainGenerator/