I am guessing that is the post processing filter that does "pseudo anti aliasing". It used to be available only on consoles, but beginning with the Radeon HD6### series you can now get it on the PC as well under the name Morphological Anti-Aliasing.
If anyone has an HD6XXX card they can test it with and share the results with us it would be great.
In theory it is lower quality than any other AA method, while being very cheap to apply (in terms of computational power) and has perfect compatibility (as a post processing filter it will work with anything, even pictures / movies).
I didn't think to test MLAA on it but I have used it before and I don't feel the 360 was using anything more than a blur filter rather than a smart edge-finding blur like MLAA does. When I used MLAA before it actually was very smart at finding edges and smoothing them rather than just blurring the image, resulting in a fairly sharp image and a definite improvement over no AA. With the blur filter on the 360 all edges were both jagged *and* blurry giving worse IQ than just the jaggies and no blur.
MLAA is also only relatively cheap compared to other AA methods, it still wasn't cheap at all on my system and in some games it wasn't any less intensive than just turning on AA for some reason. I suppose if a game is very shader heavy then there may not be enough free shader time to run the MLAA postprocessing effect, where other games may not stress the shaders enough to take away from MLAA. I don't think the 360 has enough power to spare to run any smart filter.
The blurriness of the 360 may look better when you are viewing from a distance on a TV screen since the dot pitch is so much worse so perhaps it helps obscure IQ issues, but looking at it from 2 feet on a sharp monitor it was clearly a degradation of IQ.
Actually it looked more like the muddied image you get when you run a monitor at non-default resolution even though my 360 was set to 1080p to match my monitor. So it may just be a very poor scaling algorithm the 360 was using since those games are internally rendered at less than 1280x720.
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