I can't speak for before 1.6 because I just bought it on PC (have it for Xbox but that version is screwed compared to PC). I have a 5850 card and from what I've been reading it's better to have AA switched off on Radeon cards. When I run the game with it switched on water and other effects go "missing" it's the same with changing shadow settings in the ini files, graphical glitches start to manifest when I start altering standard settings.
I've no mods or anything else installed, and other than a few ini tweaks for FOV and the like I'm running it in vanilla mode with AA off and FXAA on, and it looks fine, it's also remarkably stable compared to the Xbox mess, so far, I'm at level 39 and apart from the bad shadows in the house in Whiterun it