I would really like to hear peoples thoughts on level of detail. One thing im wondering from the coder peoples is if its possible to do some lod stuff for the terrain in scripts. that is cutting up a mesh , and then making each piece seperate and then applying lod levels to each and further setting each up to switch lod levels based on distance from camera? sounds like a lot but if someone wrote that it would be an immense help for everyone working on the bge ?
jplur I downloaded your stuff but it will take me a little while to figure out exactly everything youve done.
So I added in jetting it makes walking around a little more fun.
New Control Scheme : A for jet , and EDSF for directional controls. SPACEBAR still jumps
Added a skybox that I ‘borrowed’ from martinsh’s video texture/fancy water blend file.
Added in some extra ao vertex coloring, and threw some mist in as well.
Last but not least I went through and tried to organize things a bit. So if people want to keep tabs on this but dont want to download everysingle thing they can get things individually.
http://fleekyflux.com/3d/Prototype.zip
http://fleekyflux.com/3d/prototype
Now my main problem is just being able to parse through the python(g), I really wish I was more of a coder because I really dont understand much of any of it.
Movement : I am still working on that. You should be able to have the player move around while airborne, currently the mouse just orbits around. Want to be able to move the camera around, while at the same time having the upper torso move in conjunction with that. I have a spine Ik target along with a few other bones I would use to control that. I am still trying to think of the best solution. So far there is either ditch the more interesting Ik spine stuff and just use the base spine bone to rotate everything, then I have to figure out how to rotate bones in bge (have no idea). The other option that is used in most games is an animation that you would use to interpolate between so the first frame would be as far down as you look and the last would be as far up as you look. the problem with this is your view and where your pointing will often be different.
Also a bug with the template’s spring based jumping that I discovered is that if you hold jump down, and are falling from a great distance you can actually fall through the terrain so I need to start thinking about an alternative way to do jumping.
After that I need to add in strafe left/right animations, Jetting animations, but first I have to actually figure out how to do that 
So I am still quite clueless, hope you enjoy the slightly updated graphics 
annnddd heres some image to show some of the progress :
