It's a little bit of both... turning off all eye candy and other crap that's nothing more than a distraction surely makes it easier to concentrate on the game and your surroundings, there's no doubt about it and I won't even deny it(heck, I even play TF2 that way with most gfx turned down and in DirectX 8.0 mode). Sure it will help you to get one of them ghillie suited bitches cowering behind some bushes, but it certainly won't give you any advantage in a close quarters situation. Without good reaction time and aim those tweaks won't give you much of an edge anyway.
Yeah, that is called "LOD Scale Adjustment" with ATI Tray Tools or its equivalent.
Not so much a tweak rather than a driver option.
Don't know about ATI, but with Nvidia drivers you don't actually need any third party apps.
And with MW3 it's not so much a driver option than actually a tweak because you don't even need to adjust lodbias
through the drivers controll panel : P
(although you have to launch the game first and reload the renderer to apply the setting).