With "batching" I was referring to drawcall batching, there are a lot of threads here on the forums that go into great detail, but in short, it's possible to place multiple copies of a single model, or different models using the same texture, without generating a drawcall for each object as long as the material settings are identical between them all.
A material is the combination of a particular texture sheet and the settings that go along with it in the modeling program. Settings like specular color for example - you can build two different models that use the same texture sheet, but if you use a specular color of 64,64,64 on one model and 128,128,128 on the other you end up with two unique materials and each will generate it's own drawcall when you place both models in the sim.
Not sure about FSDS, but in gmax you can merge a part from an existing gmax file into a new gmax scene and it's material will be imported along with it. You can then delete the merged part leaving the material available to apply to another object within the scene. Those two models will then have identical material settings and can both be displayed in the sim on the same drawcall which has a big performance advantage especially if you place dozens of each as you would likely do with a vegetation object. They need to have drawcall batching enabled however and gmax isn't capable of doing that which is why they need to be processed through ModelConverterX. Again, not sure how FSDS handles this or if it's capable of batching a model.
You could achieve the same result I think by opening an existing model in the modeling program, saving it off under another filename, and issuing a new GUID. For a vegetation object made up of simple planes, a grass clump for example could be turned into a clump of wildflowers by simply moving the UVWs (texture mapping) to another part of the texture sheet and exporting as a new model. The material settings would remain identical.
That's my understanding anyway, I reserve the right to be wrong
Jim