The reason aliasing occurs is because the image on your screen is only a pixellated sample of the original 3D information your graphics card has calculated. At increasingly higher resolutions, as more pixels are used, that sample comes closer to the original source and hence the image is clearer and displays less aliasing. However aside from the fact that higher resolutions can degrade performance, many monitors simply cannot display the very high resolutions needed to effectively remove the problem.
This is where Full Scene Anti-Aliasing (FSAA), and now simply Antialiasing (AA), can be used by your graphics card to make the jagged lines in appear smoother without having to increase your resolution.It essentially resamples and blends jagged lines with their surroundings, and can be applied to either 2D or 3D graphics. 8x AA is typically sufficient at 1280x720, while you may only need 2x AA to achieve the same effect at 1920x1200.
Modern graphics cards, antialiasing can be done with a reasonable performance cost because they have been designed to incorporate these techniques into their hardware. The older the graphics card, and or the less VRAM it has, the more likely that it will suffer a larger performance loss from enabling AA I never said its being done via software. I said they do the same thing but call it differently. .AA will not resolve blurry surfaces on more distant objects. That's where texture filtering comes in.
http://www.tweakguides.com/Graphics_11.html
Run 2 x AA on 1080p and then run it without any AA on 1600p. You tell me which one looks clearer. Think your confused what AA does or you got the wrong impression. The higher the resolution the less the GPU have to add fake effects to it.
AT HIGHER RESOLUTIONS THE PICTURE LOOK CLOSER TO THE ORIGINAL. AA is techniques used by the GPU to emulate that. Run a game on a 720p and you will see a lot more jagged lines than on 1080p.
Saying your seeing more jagged lines on a higher resolution is nonsense. Buy a better LCD or get a plasma a gpu can only do so much it cant fix junks LCDs