Direct3D is our favorite portion of DirectX. It's the 3D API of choice for most new PC games and therefore gets all the tasty futuristic bits. Overall, the interesting thing about DirectX 8 is how it adds three programmable stages to the mix. There will be programmable geometry, programmable shading and programmable multi-sample rendering stages in Direct3D. You can think of it as adding programmable hardware control over the building blocks, drawing, and displaying of images in Direct3D. In addition, Microsoft's DirectX developers are making a large effort to optimize the Direct3D code by merging the Direct3D and DirectDraw code.
Programmable Vertex Shaders provide programmable control over the transformation and lighting portion of a GPU. This enables developers to do a wide variety of 3D operations. These include matrix skinning, which allows more realistic actions of skin and cloth, and N-Patches, which can increase the geometric complexity and smoothness of a model.
Programmable vertex shaders will essentially give developers much more control over geometry dependent details, which will enable a host of new effects. This will also help developers to differentiate the look of their games from one another (kind of like having that 64-piece Crayola box instead of the 8 crayon version). ATI, Matrox and NVIDIA were touting vertex shaders at Meltdown, which is a pretty sure way to guess that they're the "next big thing" in video cards. This probably means that Matrox has a T&L part in the future. ATI and NVIDIA already have T&L parts, the next-generation from S3 will have a functioning T&L engine and 3dfx has said it will have one eventually as well.
Programmable pixel shaders enable programmable per-pixel operations. One example of a programmable pixel shader is NVIDIA's Shading Rasterizer, which can render several programmable per-pixel effects including per-pixel bump mapping. This feature will enable more detailed and complex texture lighting, and therefore surface detail without increasing the complexity of geometry. NVIDIA was the biggest proponent of programmable pixel shaders, touting their highly programmable GeForce architecture.
Multi-sample rendering is where multiple images are rendered to separate frame buffers, combined and processed in a way of the software developer's choosing, then rendered to the screen. 3dfx's Voodoo5 uses multi-sample rendering to do full-scene anti-aliasing, motion blur, depth of field and soft shadows and reflections. This stage can also be programmed to do a variety of other effects. 3dfx tells us that the effects they are advertising for the T-buffer are merely examples of what can be done and that developers are doing things far more interesting and creative. The value of the Voodoo5 may increase if the right developers make good use of multi-sample rendering.