We'll need to look at the specific use cases. It's like people talked about transparency issues with deferred rendering, but GG and others "solved" it with a parallel forward renderer. "Issues" means "opportunities" sometimes you know.
I vaguely remember tessellation was mentioned in one of the PhyreEngine presentations (under LOD).
There is also a set of slides about 2nd gen graphics engine using SPU.
EDIT:
http://forum.beyond3d.com/showpost.php?p=1285392&postcount=31
First slide is an overview of cool SPU techniques in rendering. Still complaining about under-utilitzed SPUs despite the things people supposedly threw at them.
Tessellated geometry in #2 (may be 3 or/and 4, I am not sure anymore).
EDIT 2:
Hey, Mr. Carmack, keep doing what you're doing. The first implementaiton is probably going to have a few rough edges; but your team will improve.
[size=-2]...as if people here don't know already.[/size]