I finished The Witcher 2 recently. It is the most beautiful game I have ever played, even prettier than Crysis. Except I noticed this:
This was taken on a dock overlooking a river. Do you see the wavy edges there? I first noticed this effect in Far Cry back in 2004, and it had the same problem. That does not happen in reality. It is so obvious, and expecting that it would be fixed by now in 2011 shouldn't be too much to ask for.
This is a problem with the effect in general. The goal of making objects beneath the water look distorted is achieved, but it also tends to distort the edges of objects in front of and not in the water. I would imagine that deferred rendering would take care of this easily, as would the new voodoo contained in DirectX 10 or 11.
Another flaky effect is screen space ambient occlusion. It approximates why corners are usually darker, and why the pavement beneath and the undersides of cars are still darker even when it is overcast. If this effect is done right, it's beautiful and I don't really notice it. If it's done wrong, there's a big fat shadow in the middle of every character's face cast by their (big fat) nose.
I cannot verify if Witcher 2 uses DX 9 or 10/11. I am definitely seeing next-gen effects like godrays and beautiful lighting on stone and metal surfaces. I'm finding that I'm turning off effects, not because I have to, but rather because I hate them, like depth of field, bloom, and motion blur.