I've heard this phrase used several times and I assumed this just meant "flat". We live just east of the Rockies and most of our rides head west - into the foothills. This often means slow (~10MPH) climbs followed by fast decents. This doesn't tend to yield high average speeds.
When we have chosen fairly flat rides, I note our constant speed somewhere below 20MPH. On flat ground with no wind, a team can only put out a given level of power for a given period of time.
I'm now thinking (to myself) that maybe "tandem-friendly" terrain would be gently rolling terrain with relatively short, moderate climbs followed by similarly short, moderate decents. This way, the team could work hard for a short period of time on the climbs, attain some pretty good speed on the decents and carry the momemtum part way up the next hill.
It seems that when I drive my manual transmission car on this type of terrain (and coast on the downhills), I achieve the best fuel economy. I'm not sure we have enough of the "ideal" terrain around here to try this out but it may yield the best average speed.
Any other thoughts? Does this make sense to anyone else?