Gamers usually see a marked improvement in 3D graphics every two or three years. When Microsoft ties a new version of DirectX into Windows, or when AMD/Nvidia announce an exciting new feature in their graphics chips (one that developers are excited about, that is), you can look forward to new effects coming along for the ride.
Milestone titles like Morrowind, Doom 3, and Far Cry were made famous by reflections in the water, nerve-wracking lighting effects, and believable island worlds. The greatest improvement was the development of the pixel shader, which now ensures natural water movements, lighting effects on surfaces, and film-style special effects like motion blur. Today, the most advanced effects are enabled by DirectX 10.1 and Shader 4; DirectX 11 and Shader Model 5 have already been announced and will pave the way for another level of added realism.