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The hills are mostly natural, as are many of the limestone cliffs. Some of the limestone cliffs (like those right along 360) are the result of blasting to build the roadway. As mentioned upthread, all the lakes in Texas are man-made -- in the NW Austin area, they are the result of several dams along the Colorado river (google Highland Lakes).
There is much beauty there -- besides 360 (have you gone up the trail / viewing spot just to the NW of the bridge?), there is also Mt Bonnell, and of course many places out by lake Travis. The Bull Creek greenbelt right at the low water crossing is very scenic too. In SW Austin the Barton Creek greenbelt has many nice limestone cliffs, too.
I'm not 100% on the history, but it's not that old up there. I think the oldest homes in the area start at just north of Mabry, in the Balcones area (1950's). Then Highland Hills was developed, and that goes pretty much up to Murchison Middle School. The area around Murchison Middle School used to be a Quarry -- so that hill in the back of the school is probably not natural. I'm not sure when that area was built out, but I think it was late 60's, early 70's. After that, probably as a result of the quarry closing and Far West being built / Mopac being extended, the Northwest Hills / Westover Hills areas were built. Mostly 70's and 80's. After 360 was completed in '82, places like Cat Mountain and Courtyard popped up. The Courtyard area (and the County Line on the Lake) were once a boy scout camp. You can see pics of it inside the County Line.
All the while this development was radiating from Austin, there had been weekend houses, cabins, trailers and the like along Lake Austin. Those were too far from the city and too poor road access to actually be considered in the city, but development caught up with them. I think there is an area right around Lakewood Dr/Bull Creek at the base of the hills which is also older, like early 60's, that might fit in to this category as well.
Anyway, I'm sure other people can add to this. Some interesting things about NW Austin -- why does Far West stop at Mopac? What is the history of Anderson High School? Where is Spicewood Springs?
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