Whenever I place multiple trees or other entities in the scene it seems they do not follow the ground but end up either in the air or under the ground.
How do I prevent this?

usually when you press ENTER the entity is moved to the ground. but when you paint over a tree that's already there it will place the tree on top of the other tree. but usually ENTER should help...

I am not talking about one at a time. That works fine.
My problem comes when I place a group of trees or something in by using i shift. Even if I move things fast the trees will go in a straight line at the same altitude. If the terrain drops away, the trees will be in the air.
I have a rather large game and there are many trees and bushes. It would take a very long time to do this individually. I am trying to find a faster way with them following the terrain.
Ken

^ this

have tree selected so it moves with the mouse
press enter
hold shift and click when you place the tree
the next tree(s) will adjust to follow terrain height if it changes

Has this level been lightmapped first?

Strange, I have not had trees sit on top of each other using the i key, bushes and flora can, but trees normally sit fairly close to the ground and happily merge together (although this can cause slowdown, I normally avoid this and manually move any that are too close together). If you use the clone method above the trees will stay at the same level as the original cloned tree and so can sometimes float if you don't press enter when the land level drops. In the past I used to drop sown a fair amount of trees, run the game and double check they look okay. Now you can just go straight into 3D look with rmb and check things out. Far easier now

the point is you only need to press enter once though, if you extract an entity and dont press enter than it will stay at that height but as long as you press enter any tree/object you place there after (from holding shift) will be terrain height

That is correct. pressing enter key toggles back to snap to terrain mode.
Most of these operations have to be done from the repack and extract to initialize.

It looks like if i want to have them at Terrain level, I will have to place them individually. I have over a hundred trees and another hundred bushes in the game. I think this is going to take a very long time.
Thanks for the help everyone. I am still learning.
Ken