I've been thinking about developing a small engine not only to develop small experimental games, but also to serve as a base to test various rendering techniques and things like that. Right now I've been thinking a lot about how to handle textures and stumbled on megatexture, but this is something that is a bit puzzling. There is a lot of talk of it being better than the traditional approach to having a bunch of textures around and loading them as needed, but how does megatexture avoid this, I've read around that they use streaming and you can just stream bits and pieces of it as opposed to loading each texture individually, but how does that offer better performance, and isn't that just another form of tilling?

How do we sample such a texture when in a shader, do we stream part of it into memory then work on it. I've seen the latest videos of Rage and the texture do look great, but is that just the result of great artists or does the tech come into play.

To sum up, how does it work, why is it great and how could I do something similar.