Something I haven't seen in this discussion is that appears to me that the size of objects in a world affects the shadows also, in the sense of resolution/quality/jagged edges.
This for instance gives nicer shadows:
CheckSizeObject=CreateObjectCapsule(20,80,90)
SetObjectPosition( CheckSizeObject, 0.0, 45.0, 0.0 )
SetObjectCastShadow( CheckSizeObject, 1 )
Than something like this:
CheckSizeObject=CreateObjectCapsule(2.0,8.0,90)
SetObjectPosition( CheckSizeObject, 0.0, 4.5, 0.0 )
SetObjectCastShadow( CheckSizeObject, 1 )
Most likely for the camera not being too close up on it? If you zoom in too much then basically just about anything will look weird.