A case in point is the LIDAR data from the Washington State Geospatial Data Archive. While there are standards for LIDAR data, most commercial applications do not (yet) natively support it. Hence there is a need to make the data available in alternate formats. The data is available in ASCII and TIN format for each quarter quad, but the TIN format is in .e00 format, which is an old interchange format developed by ESRI. Hence, the site recommends Importing the .e00 files into ArcMap in order to use them. The only issue with that is that you need ArcMap... This is likely a reason for including XYZ ASCII as an option as well. Another option is a 3 meter DEM for the entire coverage area, which is possible to download from here. It is in Arc/Info binary grid format though...
So how do we handle all of this in LPS?
There are a few different options here, and the LPS and IMAGINE groups have been working on a solution. Prior to the LPS/IMAGINE 9.2 release, users had to either use the 3D Surface Tool in IMAGINE or the terrain Split and Merge tool in LPS Core. In 9.2, and moving forward in future releases, we are consolidating our efforts by extending the LPS Split and Merge tool and making it available in IMAGINE, which we have renamed to the "Terrain Prep Tool". It is available in Data Prep > Create Surface in IMAGINE, or from Tools > Terrain Prep Tool in the LPS Project Manager.
The Terrain Prep Tool adds new split/merge functionality inherited from LPS as well as resolving some longstanding limitations associated with the 3D Surface Tool (e.g. it dramatically increases the number of points that can be handled). For 9.2 we also added a few formats such as LAS and two flavors of ASCII (with and without point codes for breaklines). The 3D Surface Tool will likely remain available for a few more versions, until we have fully replaced it's functionality in the Terrain Prep Tool.