After lots of testing i'm starting to think the max stable uGrids setting is determined by the amount of video card memory you have.
The game isn't using as much system RAM as i expected so i don't think that is an issue, and other things such as CPU speed, GPU speed and hard drive speed are more likely to cause stutters and slowdown rather than crashes (if they are not fast enough).
Video card memory is the only thing this game seems to be maxing out a lot, and the extra textures needed for higher uGrids settings would be a good reason why the game crashes when you simply don't have enough.
That's not an excuse for Bethesda though.
No, I've tested this and as you can see with Pala's results as well, upping uGrids doesn't add much to VMEM at all -- and that makes sense, the extra grids you're loading are most of the time containing the same models and textures as the ones already loaded (think trees, rocks etc), the game is simply rendering more of them further.
But yes, there is a bottleneck. i7 980X with 6GB RAM, GTX 580 SLI and when I use uGrids 7, 9 or 11 I get the same results as Pala -- FPS drops through the floor the higher you go but none of CPU, MEM, GPU or VMEM are maxed. There's headroom in the machine, but it's not being used.EDIT:
Tools I used which may help others:
Nvidia Inspector to measure GPU load and VMEM load -- http://downloads.guru3d.com/NVIDIA-Inspector-1.94-download-2612.html
Process Monitor to measure CPU load, System MEM load and CPU cores being used -- http://www.techpowerup.com/forums/showthread.php?p=1732756