Gamasutra reports that Tim Willits of Id Software speculates that modding possibilities for Rage could be rather limited, due mainly to their new streaming megatexture system.

Willits replied that id is as open to the idea of having the gamemodded as the company's always been, noting that his own career waslaunched due to users' ability to mod id titles -- but confessed thatthe technical complexities of the game may make it less possible formodders to work with.

Willits also noted that id's John Carmack is also positive on themodding community, but sees this technical issue as an obstacle.

"Unfortunately, Rage is going to be more difficult tomod," said Willits, primarily because of the complexity of the game'svaunted megatexture system, which stores the texture data for levels asone huge texture map that streams in, rather than many smaller textures.

Megatextures require huge amounts of processing power to be baked intotheir final form for distribution on the game disc; Willits alluded toa large number of computers working for a long time to process them,analogous to a CG render farm.

Personally I'm not really convinced that the megatexture system is going to look significantly better than the way things are currently done, which is to have every object individually texture-mapped.  I think there might be a marginal improvement but it remains to be seen whether it's really a phenomenal difference.

We haven't seen the system in action before have we?

I think it's been shown in the few cinematic and driving clips that have been released, but nothing much.

So, what's the advantage? Smoother and faster streaming data rates? I mean, what other plus could there be?

much higher detail:performance ratio

The claim is that there's no repeating/tiled textures anywhere.