Is there a problem with the system, not that I know.
I could be wrong on this, but let me at least make sure I'm clear. My noodle was over-baked by the time I wrote that last night.
So, ignore that the two shapes in my test aren't different detail levels of the same shape as they normally would be. Ignore that they are offset spatially; they are two groups in the same model definition. All that was done just so I could more easily observe the LOD behavior. The sphere has the settings for the low LOD group, the cube has the settings for the high LOD group copied from the standard HTC shape bld000.
Expected behavior:
I would expect the high LOD group to be rendered up close and the low LOD object to be absent. As you pull away, I'd expect the high LOD shape to begin to fade out and the low LOD shape to fade in at the start of that transition range. At some max distance, I'd expect the high LOD shape to fade completely and cease to be rendered, leaving only the low LOD grp.
Test:
I copied the LOD settings from a standard HTC object bld00 and used them as a canonical example. They distance settings were:
Hi LOD Cube:
MaxDisplayDist=700.000000
MaxFadeRange=100.000000
Low LOD Sphere:
MinDisplayDist=600.000000MaxDisplayDist=10000000.000000
MinFadeRange=150.000000
MaxFadeRange=150.000000
So based on these settings, it would appear the low LOD sphere should NOT have been rendered inside of 600, only the high LOD cube. At range 600, the high LOD should have begun to fade out, and the low LOD sphere should have begun to fade in. After range 700, only the low LOD sphere would be rendered.
Observed behavior:
The high LOD settings seemed to be working fine. It was rendered in close and faded out at the expected distance. The low LOD sphere appeared to be rendered the entire time. Even at distance 0.
The Point?
Normally, you might not notice this effect as the two meshes are very similar and the occupy the same space. Visually, it would appear to be working fine. However, the system might be processing way more polys than are needed when flying close over complex scenes. All the polys of the high LOD group AND all the polys of the low LOD group for no purpose. And some shapes have multiple low LOD grps (low, very low, etc) so you might end up processing double the number of polys needed for no visual advantage. At least, that is my concern.
Might not make a huge difference with a powerful graphics card, but might be a problem for people with marginal systems.
Or I could be totally wrong, which would be nice to learn too so I can make sure and set up the LOD properly on my custom shapes.
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CptTrips