So I've been messing around with my Catalyst Control Center settings on my crossfire 5870 setup. Ended up setting everything to the absolute maximum, Smoothvision HD: AA is at 24x Edge-detect, AF is at 16x, Catalyst AI disabled, everything else at QUALITY and AA at Super-Sample. Cranked all settings in game to the max and here's how a cave looks like:
Check out the ground, could pass for a DX11 =). Well character models still look horrendous and, well, pretty much everything else except caves, but hey, at least it looks nice when you're exploring underground.
If graphics are your thing then check out some mods. There are probably already hundreds available, and can really make a game great. With some of the mods I have downloaded, I made oblivion look this good.