Well I have to explain it like this.
You have regular resolution textures up close. Low res farther away. The ones farther away have to be low detail because there would just be so many of them to cover up all the non-playable space that it would get out of hand quickly. The swp file would be huge, I would have to add thousands of textures to the landscape layer, it wouldn't look better imo. Maybe a tiny bit better, but not by much. Now if you exit the player space you will notice how blurry it is. But in game its hard to tell.
The problem I've found is that you have to use a certain resolution(per scale) that is high enough to hide the pixelation. It doesnt blur the pixels together very well on large scaled layers/textures.
I'm doing this on my map from the other thread (beginnings of a new map) and it looks very nice in game at 1080p. You can't really tell where it transitions from high to low detail.
So for my test map for this idea I'm going to make the textures lower and lower resolution by distance. So really far away they will be very largely scaled.
Maybe you took it to mean i'm using smaller textures, for instance 64x64 at a distance? Sorry about that, I need to work on my language explaining skills lol. I meant I'm using 256x256 for everything. It just gets scaled up at distances. I account for scale during pre-rendering of the textures. So they just are larger in scale at distances, but still at the max resolution the engine allows. I sure wish those CE high res textures worked on landscapes hehe

Would save a lot of work.
If you look closely at this screenshot you will notice the terrain in the distance looks less tiled than normal. I used 9 256x256 textures on a 3x3 tessellated terrain layer, enlarged to a large draw scale in the world. Tiling isn't very noticeable imo. Looks pretty in game. I tested some of the Trespasser default levels and they look very tiled at distances. I'm just seeing what I can do with the engine to enhance it.

I'm working on a small landscape and getting the textures ready for import right now. When it's ready I'll post a link for testing.
The final test map should have baked shadows on the landscape and dynamic and blended on the objects. Assuming it all works out lol. I'm not going to go overkill on texture variety or anything since it's just at test.
For a final map I would add all my terrain layers in TresEd to get a nice appearance, then export them to a modeling program and render them all as one large image and add the baked lighting to them. Then split them up into 256x256 textures for the playable space. But that involves a lot of extra work. So I'm gonna skip that step. It should still be a nice representation of what I'm trying to accomplish though.
I also have to put out there to anyone on the forum that makes a map in the future that if you need a landscape generated, or detailed with textures and lighting let me know and maybe we can work on something together. It's for our community after all. Of note, I really need to do the baking before you add a lot of objects/buildings as when I convert the landscape for editing you will loose some height alignment and would have to re-align every object afterwards. Not a big deal though. It's all do-able. Have fun everyone.