Mipmaps are useful at least for two reasons:
- visual quality - scenes looks much better in the distance, there is more blur (which is usually better looking than flickering pixels). Additionally Anisotropic filtering can be used that improves visual quality a lot.
- performance: since for distant objects we can use smaller texture the whole operation should be faster: sometimes the whole mip can be placed in the texture cache. It is called cache coherency.
- great discussion from arcsynthesis about performance
- in general mipmaps need only 33% more memory so it is quite low cost for having better quality and a potential performance gain. Note that real performance improvement should be measured for particular scene structure.
see info here: http://www.tomshardware.com/reviews/ati,819-2.html