I am having the exact same problem. It started in Flotsam, and frankly, for a moment I thought my GPU was melting down, or the screen is finally broken. Glad to see it's not something I'm alone with.

My observations on the topic - this was absent in the prologue, and is entirely absent in the in-doors locations in Flotsam, so it has to do something with the area itself, and thus is likely a bug rather than a feature. I can post some screenshots as well, but the ones found here and in http://www.gog.com/en/forum/the_witcher_2/shadow_problem are pretty much exactly illustrating my issue.

I hope this is fixed soon, as it really gives a creepy feeling of my computer gradually breaking down and being about to burst into flames.

Actually the screenshot I posted above is from the prologue - I haven't gotten very far yet because I spent a few hours figuring I had some setting wrong and trying to fix it.

I can also confirm the problem is present in the prologue. It is a bit harder to notice because the area is so well lit.

Oh, I see, I missed it there, but I guess it makes sense seeing as there's so much more shadow in Flotsam.

I suggest you go to the optometrist.

Same issue with me. I was running mostly on ultra with good framerates, changing the shadows from ultra to high helped a bit of not noticing as much of the pixalated shadows.

I'm pretty sure it's on purpose, as that's how the game is able to look as well as it does on current (especially lower end) hardware.

I personally don't have any problems and hardly notice it, but obviously some people can be annoyed by different things. :p

I've noticed it mainly on the shadows cast by trees, it's pretty bad. Rest of he game looks fantastic though.

I noticed a lot in the Flotsam area with all the shadows everywhere, and the surrounding area the shadows from trees and is more obvious on npc character faces. I try messing around with different settings and nothing makes a difference. Well at least my fps is stable.

Yup. Flotsam is definitely the worst for it.

As someone said i don't think it's a bug too. More related to "soft" engine programming so it doesn't hurt too much on the GPU.

Otherwise it could be great to add an option "uber shadow" so you can get something clean if you want to (and if your GPU can afford the performance cost).

dithering effect.

it's either grainy shadows or the more traditional pixelated blocky shadows. personally, i prefer this variety.

But I can put all settings to ultra and the shadows are still grid like. It is actually extremely distracting in Flotsam.