Bashiok revealed Diablo III has been developed from the ground up using DX9. This may be good news to those who haven’t upgraded their computer by the time Diablo III heads to retail shelves. This may be an indication that Diablo III will be playable in a large range of computer systems. With how fast technology is moving forward, it is possible they support DX10 and DX11. It may depend on various factors, which the Diablo III Team has not yet decided upon.
The demo played at Blizzcon, PAX and GameCom had no anti-aliasing, according to Bashiok. It looked awesome, regardless. That just tells how much detailed the final shipped game will be.
I think you’re confusing in-game ‘machinima’-style videos with pre-rendered cinematics. The Monk and Wizard announcement videos were made using in-game assets, models, and animations. Mostly shot using camera views and close-ups that the game was never designed for. The WWI announcement cinematic is obviously of a different quality. But the fact that they’re even confused for one another is a big compliment for the team that creates the in-game promotional videos. They do an incredible job.
But yes, the game will include pre-rendered cinematics. And obviously they will be amazing.