There's no effect that SM 3.0 do that SM 2.0 cannot do, SM 3.0 is about performance, because of longer shaders, but it comes with a penalty, longer shader means that it must use Dynamic Branching, a hard to implement feature due to the nature of the Floating Point Data used in DX 9. So better SM 2.0b Longer Shader, Static Branching than SM 3.0 even longer shader, Dynamic Branching and Huge Performance Impact. About the Age of Empire Game, the graphics implementation is just pure marketing crap. The SM 2.0b was able to do all those effects, and by the way is not SM 2.1.