Well, suppose you've got a simple plane of 5x5 faces, and another one the same size. Suppose these two planes are aligned next to each othere, just they slightly overlap. Now if each plane has a different group assigned, you could have the edges of each group render with decreasing opcaity, just as described in my previous post. Since the groups are overlapping each other, a decreasing opacity on the edges would result in the two groups smoothly blending into each other. Suppose the two groups have different textures, these would then blend into each other as well.
If this can be done with a shader, I'll ask in the shader forum since I wouldn't know how. Anyway, I thought as the engine is rendering each group in a separate pass anyway, you could probably integrate such a routine into the engine directly.
Does that make any sense?