Using LODs to create mass armies

I noticed in games like Kessen and Hitman Blood Money, LODs can be use to create an illusion of many lifelike characters onscreen at once. I am wondering if anybody has tried something similar to this with Torque?

I tested it myself but only to a certain extent. I created a bunch of Subarus and splattered thousands of them on the screen, and there was little or no slow-down. However, once you factor in other things like game scripts, that quickly changes and you get 5 frames per second.