Danxia refers to a "type of petrographic geomorphology" found in China. What that means is you get these mountains that look as though they were decorated with crayons by a five-year-old channelling Dalí.
That shot was taken by Melinda ^..^ on Flickr...you can find dozens of her Danxia photos here. A kottke.org reader suggests that Tiny Wings creator Andreas Illiger was influenced by the Danxia landforms in developing the iconic scenery for the game.
Not a bad theory. (thx, christopher)