Ugh, I hope that's not how it's done. In that case, I might as well be using LOD.

See this tutorial and search the page for the word "mipmapping"
http://nehe.gamedev.net/tutorials/lesson.asp?l=07

Again, this is OpenGL; I know nothing about DirectX. But in OpenGL, as this tutorial describes, mipmaps are generated automatically when the texture image is loaded. I assume/hope that DirectX also allows the automatic creation of mipmaps, with no extra effort on the part of the person creating the model.

I'm not sure which game engines I've used in the past are built on DirectX and which on OpenGL, but I know that many have been DirectX and NONE have required me to create mipmaps manually.