One of the major challenges when trying to generate realistic, believable graphics is correctly modeling ambient light. Without that, adding higher resolution displays or finer polygon meshes won't get you there.
The most efficient and accurate methods of modeling ambient light are fundamentally based on ray tracing. Path tracing is probably the best known and most popular, photon mapping is another. They are both based on random sampling, so the more rays you can trace per frame, the more accurate the lighting calculations are. (Inaccuracies tend to manifest as graininess.)
That's about what I'd expect. If they're doing it sensibly, though, it should only affect the resolution of ambient light effects, not the portion of the rendering that comes from primary rays. So, the geometry would have sharp edges, but the caustics might be blurry. Seems like a good tradeoff if it drastically reduces the overall computation.
The most efficient and accurate methods of modeling ambient light are fundamentally based on ray tracing. Path tracing is probably the best known and most popular, photon mapping is another. They are both based on random sampling, so the more rays you can trace per frame, the more accurate the lighting calculations are. (Inaccuracies tend to manifest as graininess.)