no, it can´t at least as far as I know. The reason is that terragen does not swap out models depending on camera distance. So you have to decide for one LOD.
Also I noticed that swapping out models doesn´t help so much. I know it works well in realtime engines (by the way, I like those plants, look good to me), but mostly not so much in offline renderers like Terragen, Mentalray, Vray and so on.
First of all you usually have to hold several LOD´s in memory, from lowpoly to highpoly - that would be higher RAM consumption then just highpoly (and in most cases you have some objects near the camera, that really all LODs have to be in memory).
Second, lowpoly plants often don´t render faster, because they usually use big billboard planes to save geometry - but thats something that most offline renderers don´t really like.
Actually I just work on a project where I even go the other direction - instead of the high poly plants I even use more detailed plants - that brings me near the memory limit, but it renders faster because the engine does not have to trace so many alpha/billboard planes.
But I think Matt knows best and probably will proof me wrong here ;-)
As i said, I like those plants, even if they are out of my budget (well, I usually do my own plants anyways). 100 Euro for an operator might sound steep to many users here, but it is indeed a realistic price tag.