But you can't actually go there as far as I understand it? That's just backdrop mix/LOD.
That's right. Beyond a certain point, you can't proceed further (It's just desert anyway, with a crashed starship nearby).
The play area is comfortably big -- a sniper's heaven to be exact.
Pyrrhus Rise: http://www.gametrailers.com/user-movie/killzone-2-multiplayer-pyrrhus/305584
I believe you can indeed walk to all the buildings you see in the distant/background (in the video) though. Only the crashed starship is out of bound, but I'm not sure anymore.