Apart from the known problems with "texture atlases" (which aren't usually that bad when using seamless tiles, if correctly arranged), there is the problem of LOD calculation. At the edge from one tile to another, you might have a huge jump in "real" texture coordinates, but in "virtual" texture coordinates it should be very small. This discrepancy means that using a simple texld gives you artifacts along the edges of tiles where a much lower-res LOD than required is used.
texldd can be used to work around this. However, it seems to me that texldd is flawed by design, or at least there should be another instruction that works a bit differently, by taking virtual texture coordinates instead of gradients.