Can you explain to me what are LOD's exactly and what are these for?
LOD means "Level of Detail". Briefly, the closer you "stand" to a model, the better you see it, so LOD100 means you see 100% of the detail on the visual model. But as you move away, both in reality and in real life, you can make out less and less detail, until finally, you have only a speck in the sky. Models with LODs reflect this, in that you will have sub-models which actually have less detail: LOD80, LOD50, and so on. The final LOD may be little more than a few polys to form a cross-shape.
That means that as you are rarely close enough to the model to see it at 100%, you use less processing power, and you can therefore have a greater number of models visible at any one time.
If you've ever flown CFS2, you'll have seen this; some models you can have fifteen or twenty of in view and still have decent FPS, while with others, two or three in your field of view and you've got a slideshow. That generally means that while the first aircraft model has LODs, the second - often FS converts - does not, and so the computer is straining to reproduce every poly of the original 100% model even though all you can see is a fly-spot.
Equally, you may have noticed that as you zoom in or out on a model in "flight" view, things like propellors suddenly disappear. That just means that you've switched from one LOD to a lower one, in which the prop is no longer modelled.
In theory. Transitioning seamlessly from high LODs to low LODs is a skill only the best modellers do perfectly...