Software will never compete with the high end graphics cards. And that wasn’t our goal. We wrote the Pixomatic software renderer for three reasons:
1. Driver issues / bugs / whatever. Basically a fallback for high end 3D games such as Unreal.
2. As Daniel mentions, cheap new PCs with 2 gig plus processors and no real 3D card.
3. For lower end games which don't push graphics nearly as hard as Epic, Id, etc. Of which there are several. A majority of the top selling games, actually.
I'm guessing that none of the folks here care about anything other than possibly #1 and even then they're savvy enough to fix that.
As far as how it looks, we support full bilinear blending so we can run Dungeon Siege or UT2003 without any of the washed out effects. At GDC people couldn’t tell the difference between software and hardware. Other than the framerate, of course.
And obviously turning on bilinear at full res means you'd better have a decently fast cpu. (See #2)