Yes it is, the use it for optimizations (like shadowing), and to enable True 64FP_HDR+AA. All in all the benefits are marginal with the exception of the Antialiasing.
Don't forget, the textures are locked at medium (which I believe is typically what'll be on the consoles).
Setting anything higher than 3 will not increase visual quality. Epic didn't include the higher resolution textures because they're not optimized yet and they wanted the demo to be under a gig. (That being said -- they also didn't turn on PC-specific optimizations -- so it should balance out anyway)
Also --
This is why I keep saying "A native HDR pipeline has benefits" -- you can now *very obviously* see the performance increases from having just a single optimized HDR rendering pipe versus having a standard color range pipe with an HDR pipe ducttaped on.
Yes, even when you turn off *bloom*, its still rendering in 64FP HDR. (Its to help with white balance, relative intensities; it also allows the developers to implement optimizations which would otherwise fail on 256-intensity color algorithms.)
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