Many things that are being shown off here, one of which is most definitely the new animation system. I'm liking it, massive improvement over Gamebryo's robotic, stiff animation system that was completely incapable of blending. You could find similar quality animations on a Nintendo 64 game.
The lighting looks a lot better, too.
I think they should keep working on those water textures, though. That stream looked like wallpaper paste. Ugh. I will not be happy if those water textures are the final ones.

EDIT: Oh yes, since Skyrim is the most mountainous of all Tamrielic provinces, volumetric distant fogging will be absolutely essential. It looks great, realistic, and will also allow you to get away with more optimization tricks for the Distant LOD because you'll be able to hide some of it behind the clouds.
This post has been edited by Thomas Kaira: Feb 24 2011, 11:14 PM