The shadows that appear on npc faces, especially under the eyes, look ridiculous even on ultra settings. In fact they look less intrusive on low, but of course that ruins all the other shadows.
Is it possible to disable just the on-character shadows, leaving the ground and building shadows intact?
What's your fShadowBiasScale in SkyrimPrefs.ini set to?
It should affect the minimum distance at which shadows are produced from surfaces. If you increase the setting a bit it should eliminate self-shadowing on small detail like faces.