If you drop rocks on a unit and it causes a failed panic test... which way does the unit flee? Away from where the Terradons started their fly move? Or away from where the Terradons landed. Would be neat if they flew from the direction the rocks initially came in from. You could land behind them and let them flee right into you, "BLAM DEAD"
They flee away from where the Terradons are when the test is failed (at the end of the movement phase). This effectively means you get to choose where the enemy free (hit a cavalry unit on the opponents flank, angling their flee direction to be straight along the opponents battle line. As long leave 3 models alive the whole opposing army could be panicing).
well it says you take the panic test at the end of the phase, in this case movement, and that the unit will flee from whichever unit caused the most casualties. so yes, kroxigor is correct, though i must say it hadn't occured to me to be that harsh with it!
As mentioned they flee away from the source of the panic and in the end of the phase, away from the terradons current position. There is however a way to force units to flee into the terradons. If there is a fragile unit, such as fast cav or small skrimishing unit, within 6" of the unit you want to panic you can bomb the fragile unit and fly behind the unit you want to panic. If you wipe the small unt out (4 terradons should have a good chance of doing 5 wounds on T3 guys) then the close units are forced to test for panic from the source, which is the unit that is destroyed. They then flee away from the the destroyed unit an into your terradons. Its a pretty big gamble, as you are far from certain to deal 5 wounds on 4D3 S4 hits, but it can really pay off, especially if there are no other good bomb targets. This trick is very neat against some1 who uses screening fast cav, such as Chaos Knights screened by Chaos Hounds or a Orc Boar Boyz unit screened by wolf riders.