Does this also mean it is possible now to increase terrain quality and add more details?

I've made experiments with a logarithmic depth buffer. Results is pretty cool, but there is a lot of work to do. On these screenshots I used astronaut and Discovery model from Doc's 2001 ships pack. Their sizes are real, not exaggerated as Doc originally made. No near plane clipping and no z-fighting.

This will be not enabled in next patch by default, because full supporting of a log Z-buffer requires a lot of changes in the engine. There are two ways of using logarithmic Z-buffer: in a vertex shader and in a pixel shader. First gives artifacts on close or long triangles - their Z value interpolated incorrectly (perspectively). The second method fixes that, but kills FPS to almost zero: SpaceEngine have a huge overdraw on planets, so disabling fast Z test (that required for this method) makes complex planetary surface shader with atmospheric effect to apply to huge amount of pixels.

Anyway, I plan implement a deferred shading pipeline in SpaceEngine, and logarithmic Z-buffer is a first step to it. Deferred pipeline have a lot of benefits: fast Z-pass (that will speedup logarithmic Z buffer in a pixel shader), atmosphere as a post effect (that will speedup it a lot, because there will be no overdraw, and apply it to a planetary surface and ships that are in the atmosphere simultaneously), hundreds of lights (requires for ships at first place), proper lens flare occlusion, and many other.

First (old) screenshot looks better IMO...