I don't know if I've mentioned it before, but one trick that's very handy for generating the LOD texture is to use a worldspace other than Tamriel.
Say you're doing one by Anvil. Instead of having to fight the objects in the main worldspace, switch to AnvilWorld instead. Generate the landscape for that quad. The only thing you need to do when it's done is reame the file so the first digit is a 60 instead of what it comes out as. Plus the usual 00 glitch handling. You'll avoid the risk of bumping into the 2GB barrier, plus the whole process will sail by much faster because it's not trying to preload 400,000 references.
This only works in child worldspaces though. If you have another huge worldspace in a mod, you'll just have to hope you don't run into memory issues while generating them.
Also, I'm not sure if it's been made clear anywhere, but due to CS bugs, you can't process more than one LOD mesh per session. The first batch will come out fine. Subsequent batches are nothing but jumbles of missing triangles.
I have decent luck creating "color maps" via the Create Local Maps function, which produces VERY high res output. I suspect the ultimate "color" solution lies there. It has drawbacks, the chiefest of which might be due to my ignorance with CS. Those map are full of what I term "edit marks". Yellow semicircles. Blue semi-rectangles. An occasional pink dot. I remove them by hand with GIMP. It's doable that way, but takes hours per quad. Tiling can also be a issue, but that too can prolly be tamed with some sort of GIMP filter applied to a brush. (BTW, I DO press SHIFT+C as directed by Wiki. That's supposed to remove everything but landscape from maps. It looks as if it works in the render window, but the final produce shows "edits".)
"Normal Maps" still elude me. No matter what I try, CS always produces the same four quads (at once): 60.00.00.32, 60.00.-32.32, 60.-32.-32.32, 60.-32.00.32. ( I called myself following your advice this morning but still no go. I'm sure I'm just making some dumb CS newb mistake. But it gets frustrating.
Haven't had a chance to work on this project these past several days, beyond creating a raw high res "color map" of the Leyawiin-Elsweyr quad. Oh, and removing those dratted edit marks from it. That map will, I think, be my guinea pig for tiling removal experiments.
What is everyone's thoughts on filtering and such? I'm thinking more and more that stuff like "noise" should be reserved for "normals", and that the trick with color maps is to hand "paint" 'em for looks in GIMP or Paint.net and then don't do much more than reduce 'em to a manageable resolution before converting to DDS (if they aren't in that format already). I'm also wondering if it's better to go with lower-res uncompressed map as opposed to higher-res compressed maps, all else being equal? Or does it matter much one way or the other? (Right now mine are all DXT1 compressed, mostly 2048s, and the one 4096.)
-Decrepit-