Hi Mike,"Ray - Casting" is what you would want. Please have a look at these.
http://answers.unity3d.com/questions/318428/problems-with-raycast-obstacle-avoidance.html
http://answers.unity3d.com/questions/319836/weird-raycast-steering-problem.html
And that should help with adjacent objects. stopping at terrain is easy too. Stick an invisible boundary at the terrain with a box collider.
Cheers!
Mithos
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