How to make a displacement map from existing 3d geometry In true stackexchange tradition. I am interested to see how people approach generating a good quality displacement map from existing 3D geometry. For completeness, list the qualities that make up a good displacement map. I'm not looking for links to external tutorials, but short descriptions of your methods are welcome.

My current method involves setting up a orthographic camera viewing the geometry, and setting the far and near clipping field to the extents of the geometry. Then render the image and extract the z-buffer by normalizing it so it becomes a grey scale and outputting that as a file from the compositor.

I will elaborate on my method as an answer, if no one offers a more convenient procedure.
The best way I know is to use Baking.
You must have your plane (or whatever the low-res object is) UV mapped with a new image assigned to all the faces you want to bake to (select faces in edit mode, select/reselect the image in the Image Editor).
Then in the Render settings, at the bottom is the bake panel.

Normalized allows you to specify a maximum distance
Selected to Active is important too, enable it to ensure the displacement is baked from all selected objects to the active/last selected object.
Example:

(Note that baking doesn't play nice with overlapping geometry - in this example the underneath of the sphere and torus was deleted, and the sphere moved up to ensure it doesn't collide with the torus. Not doing this will produce artifacts.)