Well, it didn't really eat them, but it affected many other system. The way our game streams textures and geometry into and out of the game so that players do not have to wait for loads is tied into this memory fragmentation fix.
We have had to do some serious re-writes of the Trident3D engine to accommodate the fixes needed to make the game work with the LOD code, Streaming code and memory management code. This has taken several months, but is finally nearly finished. Because of this we are currently writing a new system for long distant LODs. It will fix the issue, but also add greater detail in the distant view while reducing the cost on the system to render the view.
We can therefore show you more in greater detail further away, and keep your frame rate running smoothly. This system is nearly finished, and preliminary screen shots of it in action are very promising.