I have an ASUS ROG G752VL laptop with an i7 2.60GHz processor, 8Gb RAM, NVIDIA GeForce GTX 965M and Windows 10 64bit.

Back in the 1.38 version of NMS I had to keep the settings to HIGH instead of ULTRA, anti aliasing to TAA (low) and the framerate to it's default 30, in order to play smooth and without lags.Only Blur Quality was left to ULTRA because it never affected the gameplay.

I've tried the latest 1.77 version and I see that they've added something called Terrain Tesselation and things have changed.

If I turn Tesselation on the game is a bit laggy whether everything is on maximum or not. Even if I drop to HIGH the same small lags will appear.
If I turn Tesselation off everything goes smoothly even on maximum (everything ULTRA and Anti Aliasing to TAA+FXAA).

Should I keep Tesselation on, or get rid of it? I've noticed certain differences but I don't thing it worth's it if the overall gameplay is affected! Some people say that Tesselation is not that heavy but I don't see it that way.

What should I do?

I leave it off. I experimented with it a bit but also experienced some additional lag and framerate drops. The additional eye candy wasn't really worth it.

That may change (possibly for the worse as well as perhaps better) when the Vulkan API version hits general release.

I'm not even sure why you're asking. If you want better performance, leave it off. If you want the eye candy, leave it on. It's totally your call.

I just want to know if Tesselation worth sacrificing the overall performance or not.
Or maybe there is a middle way and changing something in the settings might give me a little bit of both.

I haven't tried tampering with the framerate. I always leave it to it's default setting.

With my specs i7 4.0 ghz processor, Nvidia GTX 960 4Gb VRAM, system 16 RAM,
I keep AA and textures of NMS at medium settings, framerate capped at 30 and FOV to 100.

I don't see any significant difference to the highest settings, so I chose the lowest ones that still look the same. I never had any FPS or performance trouble with the game, ah yes, 1 time: It was in Foundation when they had some special grass in the game that caused LAG, but HG did remove it in the next of their patches.

With a GTX 1060+ I would venture HDR and highest settings and framerate capped to 60 (without tesselation, can you see what it does? No? Then cheerfully throw it away...). And still I would lower the settings if they make no difference onscreen.

XS