I like njen's explanation of anti-aliasing and it fits very well with Terragen's implementation. In Terragen it also affects the quality of the motion blur if there is any. When there's a lot of complex overlapping geometry, as in distant vegetation, the image can appear excessively noisy if the AA is not high enough. There are some situations where things look sharper and more defined if you use low AA values, but as a general rule AA is a good thing.
AA affects render times in TG, but in many scenes the increase in render time is very acceptable, even with moderate amounts of motion blur. It is able to do this because AA does not usually increase the number of micro-triangles that are rendered on the terrain. The situations where AA most affects render time are usually the same situations where AA has a big improvement on image quality, e.g. with complex vegetation. In these situations higher AA can make a big difference to the number of micro-triangles that need to be rendered.
Detail Blending: During an animation involving camera movement, the subdivision levels used to create the micro-triangles will change. Detail Blending allows those micro-triangles to blend from one subdivision level to the next without a sudden pop. This blending requires more micro-triangles to be rendered, so it increases render time. It may also have a slight softening effect on the appearance of surfaces. You can reduce Detail Blending to improve render speed, but unfortunately it can also reveal very clear lines between subdivision levels on still images which often look bad and it is more difficult to control the detail levels in an image. I should be able to improve this in future by dithering the levels of detail from one micro-triangle to the next.
Soft Clip effect is a (proprietary) tone mapping which alters the brightness of pixels to improve the appearance of very bright objects in the image, giving a result more similar to photographic film than traditional 2D graphics. Most digital cameras implement something similar; it's very hard to take a nice photograph without it. Areas of the image which would otherwise be much brighter than white are brought into the visible range so that details can be seen, and it avoids hard boundaries around bright halos. Soft-clip effect, Contrast and Gamma Correction do not apply to .EXR or other HDR formats - they are only applied when saving to low dynamic range formats (BMP, TIFF etc.) or when viewing the rendered image on the monitor.
Matt
