How do I enable anti-aliasing in minecraft?
In some wallpapers I see anti-aliasing, like in this example:
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You can force Anti-Aliasing via the control panel of your graphicscard, but at this point Minecraft does not play nicely together with Anti-Aliasing. Graphical glitches and artifacts are appearing especially in the water and above torches.
Just compare these two screenshots, first without, second with Anti-Aliasing.
If you have the nVIDIA drivers for Windows, you can force this setting on.
Press right mouse button on your desktop, open the Nvidia Control Panel, click Manage 3D Settings and press program settings then press "add" then press browse and search for minecraft.exe (mine's on my desktop) then:
It made my Minecraft look really awesome, and if your computer crashes, just change all the settings back to the option with the Nvidia logo.
The other answers are correct that Minecraft has no AA support.
Unfortunately I'm at work and can't hit the Minecraft forums for the exact link, but as I recall mod that adds GLSL shaders adds an anti-aliasing setting, but with default textures I notice zero difference. (I don't think this mod is updated for 1.5 yet.)
You also, depending on your graphics card, might be able to force AA on the application externally, but that would probably look awful.
Another option I have not seen mentioned is using a different '3rd party' launcher that adds visual effects such as Spout or Magic Launcher. They add tons of graphic options and features.
This looks like a different skin. I think that the textures here are much cleaner than the default textures.
I don't think that the picture you found has had any AA applied; You can't enable AA in Minecraft at the moment.
I don't know that the graphics will ever be need to have jagged edges refined :-D