I tinkered a bit with the Skyrimprefs file and it mostly came out right. However if i'm inside a house shadows cast on furniture and npcs are pretty horrible. Does anyone know how to fix this with changing as little as possible to the changes i made to the file for better graphics in the first place?

http://imageshack.us/f/849/skyrimshadow.png/



My current file looks like this:

[General]
fBrightLightColorB=1.0000
fBrightLightColorG=1.0000
fBrightLightColorR=1.0000
iStoryManagerLoggingEvent=-1
bEnableStoryManagerLogging=0
[Imagespace]
bDoDepthOfField=1
iRadialBlurLevel=2
[Display]
iBlurDeferredShadowMask=1
fInteriorShadowDistance=3000.0000
fShadowDistance=8000.0000
iShadowMapResolutionSecondary=4096
iShadowMapResolutionPrimary=4096
iShadowSplitCount=2
iMaxAnisotropy=16
fLeafAnimDampenDistEnd=4600.0000
fLeafAnimDampenDistStart=3600.0000
fTreesMidLODSwitchDist=10000000.0000
fGamma=1.0000
fDecalLOD2=1500.0000
fDecalLOD1=1000.0000
fSpecularLODStartFade=2000.0000
fShadowLODStartFade=1000.0000
fLightLODStartFade=3500.0000
iTexMipMapMinimum=0
iTexMipMapSkip=0
iWaterMultiSamples=4
iMultiSample=8
iShadowMode=3
bTreesReceiveShadows=1
bDrawLandShadows=1
bFull Screen=1
iSize H=1200
iSize W=1920
fMeshLODFadePercentDefault=1.2000
fMeshLODFadeBoundDefault=256.0000
fMeshLODLevel2FadeTreeDistance=2048.0000
fMeshLODLevel1FadeTreeDistance=2844.0000
fMeshLODLevel2FadeDist=10000000.0000
fMeshLODLevel1FadeDist=10000000.0000
iScreenShotIndex=3
bShadowMaskZPrepass=0
bMainZPrepass=0
iMaxSkinDecalsPerFrame=25
iMaxDecalsPerFrame=100
bFloatPointRenderTarget=0
sD3DDevice="NVIDIA GeForce GTX 580"
bFXAAEnabled=0
iShadowMapResolution=4096
fShadowBiasScale=0.1500
iShadowMaskQuarter=4
iAdapter=0
iPresentInterval=1
iShadowFilter=3
bTransparencyMultisampling=1
bDrawShadows=1
[Grass]
b30GrassVS=1
fGrassStartFadeDistance=7000.0000
fGrassMaxStartFadeDistance=7000.0000
fGrassMinStartFadeDistance=400.0000
[MAIN]
bGamepadEnable=0
bCrosshairEnabled=1
fHUDOpacity=1.0000
bSaveOnPause=1
bSaveOnTravel=1
bSaveOnWait=1
bSaveOnRest=1
fSkyCellRefFadeDistance=150000.0000
[GamePlay]
bShowFloatingQuestMarkers=0
bShowQuestMarkers=1
iDifficulty=0
[Interface]
bDialogueSubtitles=1
bGeneralSubtitles=0
bShowCompass=1
[Controls]
fGamepadHeadingSensitivity=1.0000
fMouseHeadingSensitivity=0.0100
bAlwaysRunByDefault=1
bInvertYValues=0
bGamePadRumble=1
bMouseAcceleration=1
[Particles]
iMaxDesired=750
[SaveGame]
fAutosaveEveryXMins=15.0000
[AudioMenu]
fAudioMasterVolume=1.0000
fVal7=1.0000
uID7=0
fVal6=1.0000
uID6=0
fVal5=1.0000
uID5=0
fVal4=1.0000
uID4=0
fVal3=1.0000
uID3=94881
fVal2=0.7000
uID2=466532
fVal1=1.0000
uID1=554685
fVal0=0.8000
uID0=1007612
[Clouds]
fCloudLevel2Distance=262144.0000
fCloudLevel1Distance=32768.0000
fCloudLevel0Distance=16384.0000
fCloudNearFadeDistance=9000.0000
[TerrainManager]
fTreeLoadDistance=75000.0000
fBlockMaximumDistance=250000.0000
fBlockLevel1Distance=70000.0000
fBlockLevel0Distance=35000.0000
fSplitDistanceMult=1.5000
bShowLODInEditor=0
[NavMesh]
fObstacleAlpha=0.5000
fCoverSideHighAlpha=0.8000
fCoverSideLowAlpha=0.6500
fEdgeFullAlpha=1.0000
fEdgeHighAlpha=0.7500
fEdgeLowAlpha=0.5000
fTriangleFullAlpha=0.7000
fTriangleHighAlpha=0.3500
fTriangleLowAlpha=0.2000
fLedgeBoxHalfHeight=25.0000
fEdgeDistFromVert=10.0000
fEdgeThickness=10.0000
fPointSize=2.5000
[Trees]
bRenderSkinnedTrees=1
uiMaxSkinnedTreesToRender=40
[Decals]
uMaxDecals=1000
bDecals=1
bSkinnedDecals=1
uMaxSkinDecals=100
uMaxSkinDecalsPerActor=60
[LOD]
fLODFadeOutMultObjects=15.0000
fLODFadeOutMultItems=15.0000
fLODFadeOutMultActors=15.0000
fLODFadeOutMultSkyCell=1.0000
[Launcher]
bEnableFileSelection=1
bShowAllResolutions=1
uLastAspectRatio=4
[BlurShaderHDR]
bDoHighDynamicRange=1
[BlurShader]
bUseBlurShader=0
[Water]
iWaterReflectHeight=1024
iWaterReflectWidth=1024
bUseWaterDisplacements=1
bUseWaterRefractions=1
bUseWaterReflections=1
bUseWaterDepth=1
bUseWaterReflectionBlur=1
bReflectExplosions=1
iWaterBlurAmount=4
bAutoWaterSilhouetteReflections=0
bForceHighDetailReflections=1
fBlockLoadDistanceLow=50000.0000
fBlockLoadDistance=125000.0000
fHighBlockLoadDistanceLow=20000.0000

Set anything that says "ishadowmapresolution" to 4096

I just did that, didn't make a big difference though. I'll ass a link to a screenshot of the shadows i'm having problems with in the OP.

Lowering fShadowDistance=8000.0000 (to eg. 4000) helps, but might have other consequences.