1. A method of determining a reference seismic velocity model that includes lateral and vertical variations in a stratified subterranean medium, the method comprising: displaying a stacked section of common midpoint gathers of seismic traces, said traces representing the amplitude of seismic reflections for seismic events as a function of time and common midpoint surface location along a path of exploration of said medium; picking normal incidence traveltimes from said display and determining the associated stacking velocities as a function of said location for selected seismic events from said stacked section; determining true prestack traveltimes for each said selected event, by summing a term representing the best fit hyperbola for said event with a perturbation term representing the non-hyperbolic component thereof, said hyperbolic term being determined from said picked normal incidence travel times and said associated stacking velocities, and said perturbation term being determined by simulated annealing; constructing an initial reference seismic velocity model for said medium; determining travel times from said velocity model to be compared to said true prestack traveltimes by map migrating said picked normal incidence travel times from time to depth and then ray tracing said seismic velocity model; comparing said travel times determined from said velocity model with said true prestack travel times, such that when they are substantially the same within a predetermined error norm, said velocity model provides an accurate representation of said subterranean medium strata; updating said velocity model when said predetermined error norm is not satisfied, said velocity model being updated by a constrained generalized least squares solution; and returning to said step of determining travel times from said velocity model until said error norm is satisfied.