Originally Posted by Krishna

Nope, LOD is definitely detail related - it's a standard 3D engine mechanic, See: http://en.wikipedia.org/wiki/Level_of_detail

What a 3D engine usually does is have a reduced detail model with a lower number of polygons that is used for displaying the model at distances where higher polygon models are unnecessarily wasteful.

After further checking it seems that these two LOD settings affect texture & lighting only, not the 3D model, in which case it's possibly as I first thought, and the 3D model LOD handling is either hardcoded into the game, or just uses standard graphics driver routines, not something that can be adjusted.