So with the performance gains I decided to try getting rid of all the sprites and seeing what happened. This is what I came up with, 180K polys worth of static meshes:
Somewhat surprisingly, the performance hit was fairly minimal. Something like 5-7fps. I'm interested to see if that improves with a condensed, monolithic mesh version, assuming I can get MDLOps to compile it.
I'm not a fan of the apprentices/Sith, but they are placeholders. I'm wondering whether I should use some of the TSL models, maybe in conjunction with a separate mod that replaces all the K1 Dark Jedi with those as well.
Edit: OK, god damn, it took MDLOps well over an hour (!) to compile, but I finally managed to test the monolithic mesh version of the crowd. As with the level model, it was a noticeable improvement, once again returning to a solid 60fps. So it seems that the real issue at play here is entity count? Too bad there's no practical way to animate the crowd as a single mesh (I think it would only be possible with PLA - point level animation).
@ndix UR: What is your analysis of this performance issue?