why is smooth shadow killing fps so drasticly?
Depends on your system. My system handles everything maxxed out PLUS smooth self-shadows at vsync-locked 60fps with only minor dips to mid 50's now and then.
When I first log in, my FR is about 20-30 while the textures load and the game "warms up". After that everything is fine.
While I feel sympathy for the folks with lesser computer specs, I feel no sympathy for those who have not taken a little time to research and experiment to try to get the game "playable" for them.
To those who just jump here and complain without even one second of trying:

To those who at least try, and voice their concerns in an adult manner:

With all things new, there are bound to be hiccups and disappointment at first. I've been hooked on AH2 for about a year and a half and have seen nothing but great support and responsiveness by the HTC staff. People generally don't voice their opinions when things work well, only when things don't work the way
they think they should.