What you are seeing is normal. LOD textures are lower res. Problem is, they are showing up to close, or it appears to be too close. Have you tried setting the Distant Object to Ultra in the Launcher Options?
Otherwise, you are going to have to use an LOD mod to get higher resolution textures.
Sorry, maybe I should have explained better. What I'm looking at right now is the bridge leading to Windhelm, as such, I should be directly looking at Windhelm's city walls, but as you can see the city is nowhere to be seen, its like the LOD isn't loading at all.
http://i292.photobucket.com/albums/mm34/ChaoticEnforcer/ScreenShot2.jpg
Theres another screenshot a little closer, where some of the city loaded but other parts did not.