so it's a subtle effect that does not really affect lighting?

Those lines will disable specular highlights on everything. You can control this yourself without messing with the config file through the View Distance options in the Skyrim launcher, under Specularity Fade.

Better to turn off transparent AA than specularity, IMO.

edit: also, the "clean installation" option in the nvidia drivers just removes any custom profiles or settings you've made in the control panel. It doesn't (and there is no need to) delete your old drivers or run any driver cleaning utilities. You'll notice that you can still roll back to previous drivers after using the clean installation.

Yep, you just have to select custom installation IIRC and the option will become available

It's just a crying shame that the shadows still look like the 8bit age and the only way to make them look better is have a draw distance where the shadows draw about 10 feet in front of you.

Bethesdas default settings are very bad for the shadow engine, imho.
Try some of the settings from my topic here, makes it look much better (but that's subjective taste, of course):
http://www.gamesas.com/topic/1312478-the-different-shadow-settings-in-the-ini/

You can try to increase the draw distance a bit, or increase draw distance and shadow resolution at the same time to counter the loss in resolution.

There is no way around it other than reducing the fShadowDistance to 2000.0000 and iShadowMapResolution=4096. If you look on snow it's the worst because dark on light shows up more.

Pretty sure that means if you are already having issues and need to remove offending drivers. When I don't have issues I just update in normal mode and haven't had issues in many years/cards.

I'm rather happy with a distance of 2750, res of 2048 and some blur. Looks good most of the time. Only problem is that some interiors don't blur properly and there's some flickering while moving around. Still, the blur will mask the blocky edges nicely in most cases.

I can't live with anything below 8000 shadow distance ^^
I hate constant shadow pop-ups and trees look so bleak without it. With 8000 all trees look shadowed and look stunning.

Ok, for me it's just the opposite, I can live with some pop-up but don't like blocky shadows.

Have to say: with these new drivers I now can set antrosophic filters (or what ever they are called) and so on to maximum and my FPS stays just fine (around 40 fps at 1920x1080).
Except for the blocky shadows, Skyrim is looking fine now
My shadow distance is set to 6000 and indoor shadow to 3000.
Oh, I also use the latest Skyrim Beta.

As said, AF doesn't affect performance so everyone should have it set to 16x.

It was already pretty smooth after patch 1.4's performance improvements. I was able to use the HD texture DLC with no really performance loss (same settings - Ultra with shadows on High). Now with the 295.73 I'm able to use Ambient Occlusion on "performance" and still keep a smooth framerate everywhere (and my hardware isn't uber either). Between the AO and the HD Textures it looks like a new game. This is probably one of the reasons I'll keep using Nvidia hardware when my next upgrade comes around. While they don't always get drivers and features right, when they do its very, very nice.

Confirming, it's only a 45% improvement if you haven't been using the latest betas.

It does still seem to be a little more smoother over the last ones (beta drivers).

Downloaded the latest drivers, and no improvements were actually seen on my side.
AO on reduced my fps by about 15 fps, and now walls on cities keep on flickering like crazy.
I just stand still, and every 5 seconds the light on the wall seem to walk down on waves.

It's very annoying. Don't know exactly what I can do. I played around with the settings, turning AO off, but nothing worked.

i7 1.73Ghz
4Gb RAM
nVidida GTX460M.

I have no idea why, but the performance with the new driver is really bad on my system compared to 290.53 beta driver. FPS counter shows that I do indeed gain a couple of FPS compared to the beta driver, but I also get terrible micro stutter that kills the real-world performance. I reduced the VRAM footprint to somewhere around 900MB just to rule it out as a culprit, but no difference. Exactly the same game configuration and display profile.

Intel C2D E6550 + 4GB + GTX560 1GB

To help the blocky shadows you get with 2048 res, I change a couple parameters in the SkyrimPrefs.ini file:

iBlurDeferredShadowMask=8

and

iShadowMaskQuarter=2

That works the best for me, and reduces most of the blockiness. Personally, reducing the shadows to 10 feet in front of me is more noticeable and distracting than just blurring the edges of the shadows. It's personal preference though I guess.

Problem is, blurring the shadows makes trees look blurred out as well, because they have tree shadows. So with blurred shadows, alll trees will look all fuzzy and messy and pretty bad looking.

I don't use the tree shadows

My trees don't look blured...

Not since I turned of FXAA.

If you take a comparison screenshot before and after you change iBlurDeferredShadowMask=3 to iBlurDeferredShadowMask=20, I promise you you'll see a HUGE difference in tree detail / blurriness, assuming you have tree shadows on that are being rendered within a moderate shadow distance of course. The trees go from crisp shadowed beauty to awful blurry mess.
This thread has started to talk more about shadows though, lol. Off topic

maybe using SSAO overwrites the need to use the fake tree and land shadows ini values?