Solar radiation enters the Earth's atmosphere with a portion being scattered by clouds and aerosols.

Processing, archiving and distributing Earth science data
at the NASA Langley Research Center

When is it appropriate to use Ellipsoid rather than Terrain products, and vice versa?

Any MISR target which is not at the altitude at which the L1B2 product is registered will show a residual misregistration, or parallax, from one angle to another. This parallax is a function of the target's height relative to the projection altitude. For example, to visualize both topographic relief and cloud altitudes stereoscopically, the Ellipsoid is the appropriate product. Applications which require the data to be co-registered at the land surface altitude should use the Terrain product.