A couple things:
1) Which version of GIS are you using? 9.3.1, 10 etc. System specs(CPU, RAM, Windows version) would also be helpful
2) Do you have 3dAnalyst extension turned on? It might hang up or crash if an extension license isnt available.
3) Try importing it without setting up any of the terrain data. Just leave that whole part blank. If you are just looking to create floodplain boundaries the tool you will want is Tin Difference in the 3dAnalyst->Tin Surface->Tin Difference.
4) Try importing into a brand new mxd. If that works you can always pull the completed files into your original mxd.