There are several interrelated problems here, mainly due to the abstraction of height that is built into the rules that gets around a number of issues raised when you try to model height. However, as Mosc says, it gets complex really quickly if you try.
In reality, hills 'hide' targets, provide (slightly) better vision and slightly better range to weaponry, but these all very much depend on local circumstances.
If you really,
really wanted to go down this path, I guess you could say that the general height of hills are classified as 'low' or 'high', possibly using a number of contour heights etc; and the hill surface is either 'smooth', 'rough' or 'cliff'.
- Low hills are deemed to be up to 50 feet high so only provide cover.
- High Hills are deemed to be at least 100 feet high, so grant 'skimmer' to any units on the crest. Also for every 100 feet in height they grant 5cm extra range to all weapons fired from them, while hills over 200 feet high also deduct 5 cms range from all weapons fired up to them.
- Smooth hills are just that; they provide no intrinsic extra cover
- Rough hills undulate, having dips and hollows or a rock strewn surface etc, so provide cover to all units on them (-1 to shoot)
- Cliffs are rough hills where at least one edge (defined during warm-up) is impassible to all infantry and ground vehicles
However, this all causes further problems as Mosc suggested; for example, can ground units on a hill use 'skimmer' to force FF on enemy attacking them? Alternatively, can 'skimmer' units force FF on ground units that have gained 'skimmer' by being on a hill? How do you apply the 'skimmer' rule to opposing units on the same hill; how is the hill crest defined? And as for calculating who can see over what - well just don't go there.
All in all, while it is a nice idea (and indeed has some merit), I tend to agree with that if it is that important you go low-tech; building the terrain and using LoS sticks to establish who can see what - or preferably just leaving the rules as they stand, so hills block LoS and that is all.