Re: Shader Model 2.0 / 3.0 Shots
It's only supposed to provide minor shading improvements like where they belong. If you see the second set of pictures X1337 posted, the overpass casts a shadow on the ground, opposed to the SM 2.0 pic where it doesn't.
Of course, it also depends on the game you're running. All games utilize things differently. If a game isn't shader heavy, then you won't see much. If you're playing a game that is shader heavy like Oblivion, you can tell.