This is bad if true. Why? nVidia gets a free pass consequently on driver optimizations, and that's considering what y they generated with the 480 (480 only) in terms of TDP/Power they can be very desperate.
If ATI is playing with render targets and texture formats, what would nVidia try? Tinkering with water reflection rate again?

But again, moral high ground on the last 2.5 generations didn't sell ATI cards. Image quality seems decent, nothing of the really big shoddy hacks like GF FX/Quack.exe . That's purely from another perspective.