Blender and "open world"

Well the simple solution here is to sculpt your world map before you divide it up into segments. The main goal is not to overload blender when you are editing the map. If your landscape overloads blender without the other objects you have yourself a hella problem. Sculpt your map, finalise it’s texturing and layout and then split the low poly version into the plots and add the separate objects in in the separate blend files after this. That way your terrain will match up and you will still have object placement without slowdown.

Blender has no terrain culling built in like other engines so splitting up the ground mesh is recommended anyway as this way the sections can be culled and frame-rate increased. There is a risk of seams being visible but they are easily hidden in river beds, under walls or fences or by buildings or forests. The idea is to carefully plan out where your boundary lines will be so they impact the game the least. Randomly sculpting a terrain is a bad idea, you want to plan it out so it can be divided into even segments with all the main action centered in these segments away from the boundaries where problems may arise.

Once 2.5 comes around, with dynamic loading/freeing we will also have in-game recalculation of collision shapes (broken when bullet was introduced) so you could use heightmaps instead of actual meshes for your landscapes. This would greatly help out with LOD for terrain, too, as you just load up the base grid at whatever resolution you want, and apply the heightmap, whenever you move to a different LOD distance.

This means you could use a program specifically designed for terrain generation, or (more attractive to me) make an in-game level editor. It’d be pretty cool to be able to fly around in your level, and sculpt it at will. You’ll see the effects of LOD applied to the changes you just made, and then you can save out just a heightmap and other relevant textures. You could then place objects manually, or pre-make them and include object placement in your level editor.