Working with displacement in 3ds Max 9 using Mental Ray. Trying to solve the tearing problem in a way that works nicely for me. Progress pictures.

Illustration of the issue.

Starting place.

Put all polys in one smoothing group.

Increased the number of segments in the box to 4 each way.

Pushed the outer edge loops much closer to the outside.

Back to one segment. Then chamfered the edges.

And then a single smoothing group.

Same geometry but shifted the uvw mapping to more sage location.

Above with more faces biased towards the outside.

Taking what I've learned and putting it on a more real world issue.