If Bethesda claim that the so special thing about their engine is how much it draws, and when the view distance we've seen so far is minimal and the object distance in the trailer clip minimal as well, I'd say there is a problem.
The engine was made in the start and if it was their main goal to draw so much, then it's not going to change within 9 months. It would have been so from the start.
It's like if a developer says the main focus and so special thing about the engine is such amazing lighting, and the game doesn't even have dynamic shadows.
I think the biggest problem with open world games is to make the transition between 'loaded area' and distant land as unnoticeable as possible. And I think that's what they were talking about. In Oblivion you could clearly see where the loaded area ends and where the distant land begins. In Skyrim you will still see a difference, but looking at the screenshots the illusion for a coherent world will be much more believable. That's what they mean when they say
draw a lot of stuff in the distance so we have a really sophisticated level of detail. You could almost believe the mountains visible on the screenshot were rendered in full detail.
Despite what certain fundamentalistic members of this forum say, the overall view distance probably will be smaller compared to Oblivion. But if the feeling for a coherent world will improve due to that I'm all for it. The next step would be an extremely large view distance
and a fantastic amount of detail (
and no popping in of full-detail objects).