Quoted. I Hope so, considering my mac can barely handle terraria without FANCEE graphics.Pretty sure that @Skiphs was telling us it would be something that you could toggle on/off (or various levels) the other day....but don't quote me on that. Would have to defer to him there.
Some of the effects are really, really cool - triggered some nice ideas at least in my head.
I love the little polish that gets added along the road and beside the more direct "content" additions.
Edit: We're almost halfway to 1.4, or as Minecraft puts it, 1.3.10