Alright, as many of you may know I have been going shadow crazy lately trying to get mine to be as non disgusting as possible and not take a massive punch to my FPS. So, this is about as good as I can get them.

First thing is first, back up your ini's and remove them from the folder, open the Skyrim Launcher, click ultra, and then lower your shadows down to high quality. At this point, you might want to tone down the Anti Aliasing to 4 (personally I turn both AA and AF down to 0 and run it out of my CCC at 4x multi sample AA and 16x AF)

Open up your Skyrim.ini and at the botom of [Display] add;
fSunShadowUpdateTime=0.000
fSunUpdateThreshold=0.100

Save it and close.

Now open up your SkyrimPrefs.ini and change the following values;

fInteriorShadowDistance=2500.0000
fShadowDistance=3000.0000
iShadowMapResolutionSecondary=1024
iShadowMapResolutionPrimary=2048

bTreesReceiveShadows=1
bDrawLandShadows=1
iShadowMaskQuarter=6
iShadowMapResolution=4096
bDrawShadows=1

Save it and close it. This will hit you at about 3 - 10 FPS depending on your rig, location, and extra tweaks you add.

Try it out and let me know if it helped.

I'll give it a shot....reformatting and reinstalling everything tomorrow anyway.

Yeah I just did that a few days ago. At least it helped me root out what was lagging up my game.

I tried these out and I have got to say my shadows look amazing now. Thank you kind sir for showing the way.

Very nice. Made the shadow banding in Breezehome about 10x worse. But other than that, very nice.

What do expect from a DX9 game, reality? lol

I don't get [censored] fps or anything but the shadows look like concentrated ass on any setting. I did a reformat because I have an IDE port that constantly likes to error even though nothing is plugged into it and a few sidebyside driver conflicts that I couldn't fix so figured start over. Gives me a chance to put Steam in its own folder instead of the default install path.

There are 3 shadow resolution thingies in the ini, I changed them all to 4096. The sad part is the shadows on npc's (Tetris blocky) and interior shadows (random), don't know how to change them yet? Maybe Bethesda can tell me?

It makes me wonder what kind of people do the quality testing at Bethesda, are they frightened little rabbits that just say "It works amazing, everything runs and looks as it should!"?

http://nerdtrek.com/skyrim-jagged-shadows-fix/

Hope it helps

Ps. You have to set your shadow quality to medium in your Skyrim launcher settings for the above link to work. I had my shadows on highest and was almost pulling my hair out because it never worked until I read on another post somewhere that you have to put shadows on medium!

The important settings here are iShadowMapResolution, fInteriorShadowDistance, and fShadowDistance. iShadowMapResolution has by far the biggest impact to performance. The other settings have little impact on performance and some of them (iShadowMapResolutionSecondary and iShadowMapResolutionPrimary) do nothing at all. What you've done here is drastically decrease the draw distance in exchange for increased resolution. Each to his own I guess. I find the outdoors draw distance you've entered here to be too low.

Two other values you might want to fiddle with are fShadowBiasScale and iBlurDeferredShadowMask. Setting fShadowBiasScale to 1.0 will give a small boost to performance with almost no impact to visuals while setting it to 2.0 will give a little more performance with a little more impact to visuals. Setting it as high as 8.0 will boost performance quite a bit in certain cases but you will definitely notice the difference and many objects simply won't be shadowed at all. For reference the ultra setting for this is 0.15 and the low is 0.5. The other one, iBlurDeferredShadowMask, will increase the blur on shadows and seems to have more effect on shadows at medium and far distances. Setting it above 7 seems to have no further effect. This will increase the aura effect you sometimes see, however.

Or you could turn them off completely (set fInteriorShadowDistance and fShadowDistance to 0) and enable ambient occlusion, which looks surprisingly good but will give you some visual glitches in places (Breezehome hearth, for one).

I actually like the way they've done shadows in Skyrim. The performance hit isn't as bad as you think when you realize the number of things that actually are shadowed. They could have done better with the implementation, but overall I think it's an improvement over their previous efforts.