I've taken a quick look at the issue and I found out that Skyrim's Z-Buffer is usually 24 bits wide. While it is possible to increase it to 32 bits, I found that only lockable 32-bit buffers are supported through the Direct3D9 interface on my machines and lockable buffers are incompatible with antialiasing. Furthermore, because Skyrim uses deferred rendering techniques, some of the engine code would have to be rewritten to cope with the larger floats.
How good the performance improvement is going to be remains to be seen. However, if done properly, it will be noticeably better than what SkyBoost and TESVAL have accomplished so far.
I'd die to get a fix for the problem. It's practically the only reason why I have stopped playing Skyrim since november. I can't enjoy the game at all when all mountains in the background are flickering like crazy.
I think I found out what it is connected to though: fNearDistance setting in Skyrim.ini under [Display] . When increasing fNearDistance=90.0000 (default is 15.0000), flicker is 100% gone, but it causes other game-breaking issues (hard to explain, but it makes the nearby objects invisible and show emptiness). I talked to Ethatron about this problem before and it seems that the reason of the flicker is related to there being no fFarDistance setting. This is what he said:
Spoiler There is nothing you can do about it. Moving vertices around is a futile approach. Z-fighting happens because the Z-buffer run's out of precision, it makes several thousand units of distance (in Oblivion the furthest value is 9450 units) to occupy the same Z-value. The only solution to this is to move the far-plane further away (like I allowed for OGBE LLOD). In Oblivion the setting was (at the time of development) fFarDistance, but the parameter has been deactivated in the shipping game.
Either you detect fFarDistance works in Skyrim and put that to a million units approx. or you wait until I or someone else took a look at it. In my case that can be half a year or so. Don't count on it.
Maybe you and Ethatron can work together on this? I know I'm not the only one who'd dyingly appreciate a fix for this problem

I'd be happy to beta test if you ever start working on it.