Ok.....
Here's what I know or at least THINK I know! AF is awesome but it has it's limits. The main one is the program you're running it in. The best method is to leave it in Application Preference or however your paticular card refers to Aplications choice. Here's why, certain textures benfeit from AF and certain textures are hindered by it.
Anywho, until someone expalins it better, leave it in Applications Preference.
Further, Anti Aliasing (AA), fixes the "jaggies" that are formed when the Pixels we use to draw textures are on the border of that texture or object. Although AA is really cool I would use your resolution to remove MOST of the jaggies. Meaning you will see much less jaggies with AH in 1600x1200 then in 800X600. So, I would use a higher resolution in AH and use say AA x2 rather then 800x600and X4 or X6 AA. Don't forget to increase the Icon size in the game for the high resolution you use. If you don't the fields become unreadable dots!
One final thing. Even though it doesn't ask you to Re-Boot after you make changes you would be well advised to reboot.
My Best,
Dracon