Yes indeed !
I used 3 LOD of a model, and LOD works fine !
It was a cartoon house well detailled, and i welded vertex
for the other stages in order to decrease polycount.

I'm suprised, A8 people don't using it so much, caus it's lot
of frame rate gain ! Any AAA engine use it a lot, sometimes
they don't hesitate to use 5 LOD, where it's hard to notice the
transition

But i made my own in Script for some sort of LOD in Oblivion style :
Detail objects only appear when camera comes near ; and they appear with a progressive alpha fading. So the object don't have a LOD in fact, but that technique allow to save lot of
GPU power !
Each polygon or pixel you don't draw is lot of power saved !