How the cheat works
The big question has been this: How was ATI able to produce textures that looked a little worse than the standard "high quality" textures, but in close-up detail screenshots, still looked better than the next notch down the slider?

The answer: They are futzing with the mip map level of detail settings in the card's driver whenever the Quake III executable is running. Mip maps—lower resolution versions of textures used to avoid texture shimmer when textured objects are far away—are everywhere; they're the product of good ol' bilinear filtering. ATI is simply playing with them. When the quake3.exe executable is detected, the Radeon 8500 drivers radically alter the card's mip map level of detail settings.

To show you what I mean, I've used Quake III's "r_colormiplevels" feature, which colorizes the various mip maps in an image in order to show us what's happening. Here's how the mip maps look with quaff3.exe:

Quake III's standard mip maps colored for visibility

That is as expected; the GeForce3 produces very similar results. Now, here are the mip maps in quake3.exe, when ATI's "optimizations" are in full effect:

Quake III colored mip maps with ATI's cheats

ATI has moved the threshhold for mip mapping so close to the user's point of view that mip maps overwhelm the entire image. Even the counters reading "100" at the bottom of the screen are mip maps instead of full-quality textures (notice how they are tinted red). In fact, when Quake III is loading a level with ATI's "optimizations," even the game's static splash screens turn red when r_colormiplevels is enabled.

This is something different than the simple misinterpretation of a texture quality slider. To establish that fact, I've included screenshots from quake3.exe and quaff3.exe for the Radeon 8500, plus comparative GeForce3 shots, on the next three pages. You can see for yourself what effect the slider has with each card at each of the game's four texture quality settings.