I assume the "vt_useCudaTranscode 2" is the same as turning on GPU Transcoding?
This is the variable that is tied to the GPU Transcode option in the in-game menu. 0 is off, 1 is on, and
2 is forced, which cannot be set in-game. When the setting is 1, the game continuously monitors the time spent rendering on the GPU and the time spent transcoding textures. If it detects that the game is likely starting to render too slowly, it dramatically cuts back the amount of GPU transcoding to prevent the game frame rate from becoming sub-optimal. When it detects that there are spare GPU cycles it slowly raises the transcoding rate until a balance is found. As such, GPU Transcoding can be enabled on four-year-old GPUs with little to no impact on the frame rate or in-game texture streaming. The heuristic isn't perfect because the load can change drastically from one second to the next, and the data that the game receives is slightly delayed, which is why it’s impossible to say that GPU Transcoding will never impact your frame rate.
It can be overwritten however by setting the value in the config file to 2. In this case, vt_useCudaTranscode will always try to do all the work on the GPU, which can cause frame rate disruptions, especially when rendering Rage at higher resolutions on slower GPUs. However, if a user feels that image fidelity is more important than a constant sixty frames per second, this is perfectly acceptable to use, though it is only recommended for users of GeForce 500 series GPUs.
Source: http://www.geforce.com/News/articles/how-to-unlock-rages-high-resolution-textures-with-a-few-simple-tweaks