I'm a little dissapointed with the XMas screenshot - while they made excellent use of SpeedTree, it's the ground texturing and those rocks that bother me. The ground texture doesn't seem to be taking use of the parallax mapping and neither does the rocks. Another thing is that the rocks on the ground have a very HIGH polycount as opposed to the large boulders - neither even seem to use bumpmapping or anything to give them a 3d look. I do not believe they are using any form of dynamic lighting either?
Anyway, it looks great but it doesn't seem like there was too much further work on the graphics engine they are using since they posted their first screenshots over 6 months ago, and that they are not using their current engine to it's full potential.
i would like to say 'yet' to your comments as i think Larian is still in the learning process & who knows, maybe they also factor in the wide range of computer performances so they have to balance performance against eye candy.
the way i see it, hardware T&L is just for looks only unless it's utilised in gameplay as how it's done in Deus Ex or Oddworld (light & shadow).