I found a video where someone tweaked the configuration files of Rage and got much better quality and no visible streaming pop-ups:
http://www.youtube.com/watch?v=V7kfVxjPBcUThe engine looks fairly complex from what I saw from the tweakings. The main problem is to decompress textures on the fly. So it uses several cores for that and if possible it also uses CUDA on the graphic cards (even multi-threaded if possible) to process textures each frame. But some people crank up Anti-Aliasing to the max and realize worse texture quality in the game then. The reason is that the GPU has less or no power left for transcoding and CPU has do the entire job on its own. But if there is only a dual-core CPU then it cannot handle high quality textures every frame.
Also it looks like you can force the engine to override some automatic quality adjusting to get better quality.
You will find some interesting links below the video I linked above.
My copy of Rage is still on the way to me. I hope it arrives today, but maybe it will come tomorrow. Anyway, I am looking forward to it.
