I must say I'm a bit confused. What is being discussed? The render engine or the game engine (implementing the render engine) or both? Afaik, the render engine is replaced with a new one. This has new features and better handling than the old one. That doesn't mean that everything within it will be used. The new SSAO/ATOC/Whatever may be dropped, but we have shadows. Same as with Oblivion had shadows in the preview video but was dropped.
I have to say that visually it doesn't look all that different with the new renderer. Shadows, improved shaders, and most likely better internals that are invisible to the eye. If you *want* something to be better, it *will* be better, right? Placebo is mighty powerful. The things that makes this look better seems to come from the game engine rather than the render engine, but wouldn't be possible without the new render engine.
Take a look at this, Oblivion objects in Crysis Engine:
http://www.youtube.com/watch?v=YwmAIfL_yoo
There is shadows and SSAO, and probably some things I don't even see. But it still look like Oblivion, there is nothing here that makes it look like Crysis. Trees are the same, buildings are the same, water probably improved due updated shaders. And one hell of an achievement for a single modder just wanting to test some stuff
Why not use Crysis? Because there may not be enough cycles to do the 50000 other things that the game engine needs done, or they don't speak well enough together (file formats have always been a bit tricky, wonder what will happen now), or BGS don't like the face of the Crysis crew
- who knows - they have their reasons.
Want to see something completely new? Replace the designers
As was mentioned earlier, the game engine was rebuilt with most of the stuff new, including a new render engine. If I rebuild something from scratch that I've made before, chances are high the result will look the same but better optimized. Task: Create a rock. I'm gonna build that rock the same way I always made it, even if the topology changes to suit new animation systems (lol, bad example).
There are endless examples on what the new game engine can do, probably because the new render engine frees enough cycles to do it. Do you want higher poly models? Prepare to drop other features to get back the cycles. And as for polycount, do compare Skyrims mountains with Oblivions and tell me which ones appear more rugged. Sorry, but I think BGS knows more what they're doing than you and I put together. You can't just add stuff and think you get it for free. Textures have already been explained, so I'm not going there.
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Not quite sure what is meant with "GAMES HAVE NO POST PROCESSING" though.