Well, sho nuff... after about 30 minutes of Googling and updating my Harmony remote, I now have the LED local dimming menu item on my 65LW6500! No time to test it now so it may do nothing... might just give you a menu option to something that doesn't work. Don't know yet but our friend was exactly right. If you put the service menu code on your Harmony remote so you can access the service menu, it's exactly as our family friend indicated: you set a zero to a one in two different menu options and voila: LED local dimming on the menu. At this point, I really suspect that LG is doing this to placate customers who complain "where's my local dimming". I bet it does absolutely nothing: other than make the customer happy by making them think their TV does local dimming. But I don't know for sure so I reserve final judgement. All I had was about 30 seconds to look at it but at first glance, turning it on seems to change nothing visibly.
For those who want to play: the deets are: You have to update your Harmony remote (I guess some others will work too) so you get a "Service Menu" button. Tap that button, enter 0413 as the code, and you can access the service menu. Then you change the LED local dimming option on tools 2 and also tools 4 (I think, might be tools 5), and once you change those two "local dimming" entries from zeros to ones, you get a menu item for it. All I can say is be careful and you didn't hear this from me. ;-)
Be aware that the LED local dimming won't show up until you set BOTH of those two settings above. One won't cut it.
Info on how to get "Service Menu" on your Harmony:http://harmonylghack.wikispaces.com/
Some info on a few service menu options:http://www.avsforum.com/avs-vb/showt...php?p=20540589
Have fun and practice safe TV hacking. If smoke comes out of your TV, don't blame me.