Rage has many separate files for the individual sub-levels of the game world. Basically there's the big hub which is the wasteland, and then each city, bandit hideout and other levels are separated. What id could do is to release one of these smaller levels at a lower compression setting; the vast majority of them are only 60 to 300 gigabytes in size, so even a 10-fold increase would result in a manageable download.
As for the texture res tool, id's works backwards - they brute force check the entire game world to see which tiles are never visible from the player's point of view, or which could work with a smaller resolution. It isn't really possible to change texture resolution upwards once the entire game world has been atlas mapped.
Although, I'm curious how that would work... How do they determine final texture resolution?
Let's say the artists work on a sub-level like Wellspring (a city) and finish all the individual assets - buildings, terrain, backgrounds, characters. Everything has UVs and textures are completed.
- Do they re-scale the individual textures so that they can fit into the selected fixed size virtual texture with 90-99% used space? This could explain Carmack's comments on how some of the original texture detail is lost during the process...
- Do they try a 1:1 fit of the unwraped UVs of the individual assets into a predetermined size (has to be power of two like 16k, 32k, 64k etc) and check to see how much space is left in the end? Then they proceed to add more stuff to fill out the otherwise wasted space? Or does the wasted space get compressed to 0?
Actually this one makes more sense, if they're using proper lossy compression then all the wasted space should simply take up a single byte
Also, for the tiling to be really efficient with distant stuff, it'd make sense to fit all individual objects (especially small ones) into square areas - that way a single tile could contain all the texture data and no extra tiles would have to be loaded because 5% of them belongs to, say, an ammo crate or something.