SweetFX with the FXAA or MLAA in the game disabled gave me the best overall look, there is a thread in these forums with the settings you need that gives very good results without any fps loss from what i've seen. Very low performance hit, and the sharpness is much better..
The game has a very water or oil painting look to it, it is actually very good looking, its not meant to be like Crysis or Metro 2033 or the Witcher 2... this is the style they went for, and if you look around you can clearly see some lovely scenes and artwork... the water is amazingly good, the whole game is very nice looking if you look at it in the right way.
It also loads VERY quick, quite surprised with that..
Playing with KB/Mouse is the best method, i've tried both, and for the first time in a while I'll put the gamepad down even though the game supports it and use KB/Mouse. The scroll wheel and number keyboard makes such a difference, the gamepad onscreen wheel is WAY too slow..