Some results to share.
This is the new USGS scenery using mostly default FG material mapping and textures.

This image illustrates the concept of using the rounded lake layer as a sand layer with a more accurate lake layer on top of it. You end up with what looks like beaches from low water in the lake. It also give you a good view at altitude of the complexity of the scenery.

From a different angle.

Here is a comparison of ws2.0 and what the ws3.0 will hopefully look like.

Here is the difference in vertices between ws2.0 and the custom scenery. Most of the layers need to be ran through the rounding script to lower the resolution and also the road network needs to be reduced as it is in ws2.0. Hopefully we can do a little more than what was in ws2.0, but I think what is in this scenery is going to prove to be to much unless we can include a robust LOD system for it.

The inflow to the lake, notice the sand layer and how good much it enhances the look of the lake,

A close up of the lake shoreline. Notice the "un-rounded" layer on the inside of the sand layer. Using a rounded version of this land class would look much better. Any roads that run close to the lake shoreline (no good examples here) that would normally end up in the rounded water would in this case be on sand instead.

This is with a more custom material file and textures.

Same here. The USGS NLCD has at least two separate layers of town or impervious. If you look at the urban or town area in this shot, I mapped the residential area to Town/SubUrban and the downtown commercial areas of the town to BuiltUpCover. It gave it a really distinguishing difference between the two different areas of the town. This is an area that we could use some new professional textures. Although what we have actually work pretty well as they are.

You can see what I am talking about better in this close up of the town.

Overall, I am impressed with this data, keeping in mind this is straight off the site with no editing other than mapping and a few texture in some cases.