Originally Posted by Piggus
It's currently the best form of lighting that's possible in real-time on a wide range of graphics cards. We're still a few years away from full global elumination in real-time. There's only one game engine I know of that supports GI in real-time and that's on the PS3. Besides, HDR looks a hell of a lot better than no HDR in CSS. I could take some comparison screens if you want.
Shader Model 2.0 HDRR isn't done through FP16 blending and isn't as precise (8-bit as opposed to SM3 at 32-bit). That's possibly why it isn't particularly impressive in CS: Source. The difference is quite noticeable in AOE3. Of course the use of SM3 allows for a performance advantage that'll permit higher quality settings for your card (ie crank things up in the driver control panel, in game or up the resolution) and so indirectly the games are better looking. I play CS without it because I find it to be a hindrance from a competitive perspective.