There was an article in Game Developer magazine about just that very thing a while back. I'd say it was within the last three years, but I don't remember which issue.

3D video games need to do this as a matter of course in the process of texture management, especially with regard to how the textures fit onto the limited space of a graphics card's VRAM.

I don't have a link to the article handy or anything, I'm afraid, but perhaps it's on gamasutra.com or something. Look for articles about texture management.