BSP level, is it OK?

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i need to ask this:
1. how to use LOD for my level (my level is not a terrain, but huge mesh level exported directly from Max using pipeline). is it EntityAutoFade acting the same function as LOD

2. when i LoadAnimMesh (instead of LoadMesh) the level, it will slowdown the game, but i need to LoadAnimMesh in order to FindChild which mesh i wanna autofade later. Is it the right way to export in different entity, let's say ground, trees, huts, goodies, props in separated files and load it back again all of them within B3D. or any other ways out there?

3. my friend ask me wether im using the right way of rendering processing for level, because he said that BSP is the best at the moment for speed issue especially for MMORPG type of game, my question is, if i loadmesh the level exported within Max in b3d format, is it still process the rendering like it render the BSP format (u guys know what im saying, render the thing in front of you and not render the thing behind the wall)