One of the main features of pixel shader 3.0 is that is supports dynamic branching (also called data dependent branching), something that nVidia of course makes a big deal about. This demo however shows a way to implement dynamic branching without pixel shader 3.0, using basic graphics functionality such as alpha testing and stencil testing. Not only is it doable, but also gives every bit of the performance of real dynamic branching.
Interesting.
