Here's what I did to get my landscape LOD working, I haven't tried it on object or water LOD yet.
x. You need the programs nConvert and Oscape. Google it
Try to find the most recently updated versions. In this guide, replace yourworldspace with your Worldspace EditorID of the area you're creating LOD in.
xx. As a cautionary step, make sure you unpack textures from "Skyrim - Textures.bsa" to your Data\Textures folder using a bsa unpacker, I used Fallout Mod Manager
Convert the .tga files using nconvert and a .bat file with the line nconvert -out tga *.dds (You must copy and paste nconvert.exe and the .bat file you just created into each folder with the .dds textures extracted from the .bsa)
- Leaving the .dds files, move the .tga files to corresponding common\Source\TGATextures folders (i.e. Data\Textures\lod goes in Source\TGATextures\lod). You'll probably have to make the TGATextures folder youself.
- Right now I only have the following \TGATexture folders: "landscape", "lod", and "water".

ALRIGHT. Here we go:

1. Make sure to delete all folders and files that are within these locations
- common\Source\DDSTextures\Terrain\yourworldspace
- common\skyrim\Data\meshes\Terrain\yourworldspace
- common\skyrim\Data\textures\Terrain\yourworldspace
- As well as the .lod file in common\skyrim\Data\lodsettings that's named after your WS. If you can't find these locations, make them. Otherwise, delete all the files contained.

2. Oscape time:
- "Active Plugins" tab: select your worldspace after hitting fill, make sure "feature-map" and "surface-map" boxes are checked, hit extract
- "Preview" tab: at the very bottom, select your destination folder, it can be anything. This is where you store your .raw. Click accept
- "Generator" tab: Set texture to 250000 (adjust if you get "too many triangles"). Check the meshes, normals, colors, and overwrite boxes.
- Meshes: make sure the following boxes are checked (and ONLY these): 1/2, 1/4, 1/8, optimize for overdraw, NIF
- Normals: same as meshes, select ONLY these: 1/1, 1/2, 1/4, 1/8, (one resolution of choice), PNG
- Colors: 1/1, 1/2, 1/4, 1/8, (one resolution of choice), PNG
- Set the bottom folder to somewhere. Remember it, you'll be copying files from here in the next step. Hit Generate.
- Exit from Oscape, I don't see any results coming from the Installer and Recovery, and this still works, so they're ignored.

3. NConversion
- Create a .bat file with the following line nconvert -out dds *.png
- Copy nconvert.exe from where you put it, as well as the .bat file you just created, to all of the TEX folders you generated from the Oscape "Generator" tab.
- In each folder, execute the .bat file, and it should generate .dds files.
- Copy the TEX .dds files from each folder to the location common\skyrim\Data\textures\Terrain\yourworldspace (Put all of them in the same folder) Again, if you don't have these folders, make them.
- Copy all the LOD .btr files to the common\skyrim\Data\meshes\Terrain\yourworldspace folder.

4. Creation Kit...
- Load your Data, but don't load anything in the render window. Doing so can cause crashes from time to time.
- Make a border region in the Region Editor. it doesn't need to contain anything, it just needs to outline the total area where you will want LOD generated in. And make sure the "border region" box is checked before you apply.
- Go to Worlds -> Generate Max Height Data For World (NOTE: This assumes you read the pervious step and have created your border region) Hit yes, then no.
- It'll take a bit to load, but when it's finished, a box will come up that says "done"
- If when you hit "OK," the CK crashes, make sure there is a fresh yourworldspace.lod file in common\skyrim\Data\lodsettings. If not, try again. And again. Same with most crashes.
- SAAAAAAVE
- Click Worlds -> World LOD. In the new window, choose your worldspace; check the Generate Diffuse Textures and Generate Normal Textures boxes, with "source only" selected. Hit Generate
- This part takes 30 minutes for me.
- When it's done, exit the CK WITHOUT SAVING. If you save, your landscape will disappear.

5. Fire up Skyrim, check your worldspace to see if the LOD worked. If you don't know how, use the console

command cow yourworldspace x y with the x and y being a cell coordinate within your worldspace.

Making games isn't easy, apparently. Hope this helps some people

Thanks to everyone in this forum having problems with the LOD, Bethesda, to the developers of Oscape and nConvert.

This all looks very kosher (almost exactly the same steps I used), except for one thing - why are you generating textures in the ck after having generated used oscape/nconvert?

Thanks for putting this up!

The textures in oscape didn't work for me until I went through the process in the CK as well.. So I put it up

No crash, no .lod.
Is there another way to make .lod?

You can also make .lod by extracting tamriel.lod out of meshes.bsa and simply renaming it to whatever your workspace is.

Really? Okey, thanks. I'll try.

My own code monkey (husband ) is working on a small program that will let you make a .lod file, and input the worldspace name, start x and y values as well as the size of the world. I'll back when I'm sure that it works

A .lod file generator:
http://skyrim.nexusmods.com/downloads/file.php?id=10896

Hope it will be helpful.

Yeah, the tools is very helpful, thanks for it!

How to change the landscape lod texture? I see only http://i.imgur.com/rX6rj.jpg.

I was trying to generate lods but in Oscape I get this message when is converting files creating the lods ....

"The current tile contains too much triangles"

Why that? I picked 3/3 skyrim vanilla and 1024 texture size ...

Change "Target max. resolution" to smaller, try f.e. 320000 (~1/3 of vanilla Skyrim).

Anyway, changing texture of lods is still actual.

I tried to load ingame and it crashes as soon as I type cow issgard 7 13 but in ck looks fine why?

Ok I made it work and removed the lod thing settings that made crach but when ingame there is a severe cap at distance like if the maximum visible distance is a big square around the player cuts everything out unless I get closer sea and land is not visible beyond that border .. why that what's the problem?

When I generate it it makes crash my game , whenever I try to teleport there is there a different way to run it may be? I placed in a random folder as the instructions said and typed issgard then 0 0
and created the lod , put in the lodfolder suggested and when I do cow issgard 7 13 it crashes the whole game ....

Something wrong?

When making meshes in Oscape, I have read somewere (can't remember were...) that the Target max. resolution setting depend on the size of the worldspace. It was something like 1000 points per 4x4 tiles would work, and maybe more as well.
I could be wrong but I think you can use this calculation: (size in pixels / 4) x 1000 = OK Target max. resolution, so for a 1024x1024 world it would be (1024/4)*1000=256000

But the game works without the generated issgard.lof file in DATA/lodsetting?
How large is your worldspace? That is, what did you type in for question 4?
All the cells in the worldspace must be within -256,-256 to +256,+256, that is a world of max 512 cells.

I used a 1024 this time but I reduced in photoshop to 768 x 768 , all wors fine I can teleport there in world fine if I do not use this lod generated item , but I did all the tutorial with oscape and I can't see beyond a certain distance its all getting capped and revealed only when I get close ...

Using 1/3 skyrim made it complete in oscape

as for the lod generated file of ur plugin , using it instead makes crash my game when I teleport there ... so

Typed issgard
0
0
24

as I have a total of 576 cells in 24x24 cells on a map of 768x768 ...

I use : no distant view
I do not use Crash ...

It's because you have no .lod file for your worldspace.

I have generated with oscape why I do not have? I can see them in the right folder meshes terrain

You need four kind of files: Mesh (.btr) (Oscape), Color textures (.dds)(Oscape), normal textures (_n.dds)(Oscape) and a .lod file for the worldspace.

Igenerated all four but the lod file makes my game crash and without it I guess I do not see the lods ...

is there another way to generate this?

up

Oh now that's handy. I've been trying to make a worldspace for Vvardenfel/Solstheim and LOD generation has been doing my head in (CK claims to have done it but doesn't place it in the lodsettings folder despite it being there). One question though - the .LOD file was 1kb, is that normal sort of size for a map that's 128x128 cells? Sorry I'm not very experienced with .lod files so thought I'd check.

If your world is the same size or smaller than the vanilla game you can copy Tamriel.lod from Data/Lodsettings, and rename it to your worldspace name. 'MyWorldSpace.lod'