It appears that the game automatically lowers the resolution of shadows (making them more blocky) when more are on screen. So, if you lower the range of how shadows are rendered then they are nice and soft, but only in a VERY small radius around the character.
If you want to check this out find your "SkyrimPrefs.ini" in "C:\Users\********\Documents\My Games\Skyrim"
Look for the line
fShadowDistance=4000.0000
change the "4000.0000" to "400.0000"
Start the game and enjoy nice, soft shadows... just around you. There is probably a nice middle ground, but I haven't found it yet.
Hopefully this will help you guys out!