Tile Resolution Bias
Based on what I have learned about the LOD control, I would say that the "tile resolution bias" setting is mostly about a calibration of the tile distance based LOD control function to match the texture resolutions. I have also added this slider in the D3D9Debug Controls from where it can be adjusted in realtime, although the setting isn't saved.
Here are three screen shots:
1st) The bias slider is in left most position: textures appear blurry due to under biasing.
2nd) When the bias is increased the yellow "arrows" behind the delta-glider as well as the far-end of the runway will appear naturally sharp.
3rd) The bias slider is pushed to right most position; the far-end of the runway is over sharp, the lines in a runway have partially disappeared and they are flickering/tearing due to over biasing like the terrain all around. If a mipmaps are enabled, then the far terrain is rendered using the second mipmap and the flickering/tearing won't appear.
Mipmaps will significantly increase loading times and runways may appear blurry when viewed from a very shallow angle.
In the screen shots, anisotropic filter is set to 16 and tile mipmaps are disabled. Mesh resolution is 32. Mesh resolution shouldn't have any effect to the resolution bias. The resolution bias will greatly effect in performance but as far as I can tell that's merely a side effect.