These techniques were developed for PC game production, but have been optimized for use with console games as well.
The shader looks for the specular and opacity channels in specific files and is supposed to be used for two specific cases: transparent parts (leaves) and opaque parts (trunks).
For small vegetation objects (less than 300-400 polys), LOD's may look bad. It can be better for them to have a single LOD and tweak carefully the sprite distance ratio in Sandbox to get a good quality/performance trade-off.
When creating vegetation assets, it is recommended to check regularly how they look when placed as a vegetation object in Sandbox. Popping may be minimized by tweaking the distance ratio parameters.