DD's characters were actually just pre-rendered 2d sprites, and are pre-rendered using Larian's in-house computers with high-quality setting. That explains their silky movement and well-defined appearance.
However, BD's characters are actually 3d characters model rendered real-time using your computer's graphic cards. For better or for worse, there will be a definte drop in quality, for BD's requirement is not like those of HL 2 or Doom 3. Actually, IMHO, the rendering code needs some work. But I will be buying BD for the game, not how it look, so I am willingly to pass it up.