Read up a bit on id Tech 5 and see that this dev is actually going the other direction in regards to textures, using megatextures. So, instead of having, say ... 1000s of 512x512 textures creating the landscape and having to align each piece this way or that way, the engine throws one blanket texture of ~128,000x128,000 onto the models. A single landscape texture of up to 20Gb covers the whole thing, and pieces are streamed as needed to draw to the display. The benefit is that developers can then texture their textures, not have to cut up elaborate set pieces and then realign them piece by piece on models, while also giving players the ability to modify terrain models on the fly, with the megatexture 'warping' around those modifications.
Sounds like cool stuff. The Wii def. won't be able to run it! ;)
