Using multiple levels of detail for a part of your scene can help improve performance. For example you could use LOD to simplify an Actor that is far away, saving on costly vertex skinning operations. Another use would be to combine several small objects into a simplified single object, or to apply a cheaper shader. LOD can also be used to hide objects when they are far away.
To create an LODNode and NodePath:
lod = LODNode('my LOD node')
lod_np = NodePath(lod)
To add a level of detail to the LODNode:
my_model can be any NodePath you like.
Note that the first argument is the "far" distance after which this LOD will disappear, and the second argument is the "near" distance at which it will appear.
Continue this pattern to add as many levels of detail as you like. For your lowest level of LOD the far distance will be where the model will disappear. If you would prefer it to stay visible even when very far away then use a sufficiently large number for the far distance.
Note that the order in which the switches are added must be the same as the order in which the LODs are reparented to the LODNode's NodePath. This is important to remember if you are not reparenting the LOD immediately after adding the switch.