We had one press person who came to Valve who spent about 30 minutes in god mode letting soldiers blow him around the room whenever he hid, which is a little over the top, but gives you a sense of how much fun it is to have single-player opponents who aren't stupid. Personally, I think it is the combination of Worldcraft 2.0 and the Half-Life engine that is coolest. If you're happy with Quake on a 100 MHz Pentium, you should be happy with Half-Life on a 120 or 133. Or will the software version be ab. The software version does everything the hardware version does.
Colored lighting is in the software version.
The fogging that Jay Stelly has done for our water effect is pretty amazing, especially when you see an Icthyosaur zipping out of the depths. Transparency works just fine in software. Decals work fine in software. Additive transparency for fire works in software. Most of the people at Valve develop and play Half-Life in without hardware acceleration.