LOD
LOD models are the low level of detail versions of the original models. This is what you see loaded far away. As you get closer to the LOD model, it should change to the original model if it has one.
How 2.0
Vice City
To create an LOD version of the original model, create a model that has a lower level of detail than the original model. The LOD models should have the same name as the original model except the first three letters of the LOD model is replaced by the letter "LOD." Use a collision maker ro create an LOD version of the collision of the original model. The LOD collision should be the same size as the original model's but with nothing in it. In the IDE file, the draw distance of the LOD model should be more than 300. The draw distance of the original model should be less than 300.