I was in the back room of Epic Megagames in 97 when Tim Sweeney showed me his automatic LOD on the Skaarj model. It was pretty basic compared to the current tech, but I think remember him saying it didn't require lower poly meshes/maps to be generated by the animators/artists. I don't know if the LOD was pre-baked or not at the time, but given that we were running the first MMX chips it probably was.