How do I set up Anti-Aliasing? Is it a setting in the game?
And how much does it reduce the FPS?
Yeah, Anti-Aliasing is just an option in the game. It will usually have something like "Anti-Aliasing:" with a dropdown selection thing with 2x, 4x and 8x. The higher the number the smoother the edges.
It decreases performance quite a bit. Other than resolution, it is probably one of the biggest performance droppers.