For cut scenes yes, and i think Naughtydog disclosed on the making of the first uncharted that the movies were all pre-rendered. of cores uncharted 2 has progressed now, so that would mean that it could now all be in realtime. though, there's no real way of knowing cause the cut-scenes could all be uncompressed on the BD, (just like it was in the first game) so even if you stared into the screen you wouldn't be able to tell the differences.
you could ask people at the "
The Framerate Analysis Thread" and have someone check the performance of the cut scenes, if it's realtime then naughty dog has once again set a new record.
anyways back to original topic, games these days do have a couple LOD forms of one model nowadays.
http://i38.tinypic.com/2418k0g.jpg
and it's up to the tesselator to diminish all that and just have only 1 LOD mesh and have it smoothly scale. (if only more developers could find a way to accept and adopt this method, doing that would help games hit 60 fps......or at least a solid 30)