Its a Rice Video alpha I've been working on for ages. Basically, it allows for custom pixel shader effects for Direct3D9 (via HLSL) and OpenGL 2.0 (GLSL). Which means, its possible to get true cel shading, since the models are processed, as well as your textures. As you can see, it uses edge detection on Mario's model, which gives it its distinctive cel-shaded outline.
EDIT: More pics of Datadyne's cool pack. Gosh, I'm in luv with it! =^-^=
This has got to be one of the most visually pleasing packs I ever seen ^-^