Timothy lottes would be able to provide a more technical explanation ( I don't have a complete understanding of everything but you can see some of his here
http://www.neogaf.com/forum/showpost.php?p=44697036&postcount=13149 , his explanations also show why downsampling = very nice edge quality)
But basically SGSSAA is actually FSSGSSAA (Full Scene Sparse Grid Super Sampling Anti Aliasing)
Where as typical TrSSAA is actually TrSGSSAA. The difference being, that FSSGSSAA causes alpha test = pass for all pixels (and not just for Alpha tested objects), which causes it to apply the SG Super sampled shading based on your number of samples to the entire scene a number of times to separate buffers offsetting each buffer differently before they are all blended back to the main frame buffer.
If you ever noticed that when using SGSSAA that the rendered scene is extremely clean and alias free, but the UI/2D elements sometimes become slightly blurred. (depending on the AA flag function and the game itself) This is the reason. It's basically akin to the old days of FSAA, except there is no way for SGSSAA to be told to only apply to certain passes since it's a driver hack basically. Hence it just does everything most of the time.
(. In FFXIV 2.0 for example, you can get 4xSGSSAA and skip the UI rendering pass, freeing you of some UI glitches and blur with the flag 0x004012C5. The caveat however is that this flag works *only* for 4xSGSSAA. It flat out doesn't work with 2 or 8x SGSSAA for whatever reason.)
Sometimes, when you add in FXAA to downsampling it may help with specular highlights, but generally with cars, there are temporal issues with the shading that potentially only very high ratios of downsampling would be able to fix i'm guessing like below due to the angle and intersecting geometry/UV/etc. (IE: 4x4=16xOGSSAA)
I'll use UE4's temporal AA as an example because it misses this same sort of thing
http://i.minus.com/iT4t3KxpK5LB7.png
This flickering/crawling line, I am fairly certain it is a shading issue due to the angle of the two intersecting walls, where this is supposed to be; IE; a flat long mid range roughness specular highlight; The Temporal AA doesn't quite know how to handle this as far as I can see.
Compatibility flags generally tell the driver what kinds of frame buffers to look for when it's doing all this. The 5 at the end of that FFXIV flag,tells the driver to ignore the primary flip chain (where the UI pass is probably added i'm guessing). This allows it to not apply AA to the UI and cause some minor blurring and super sampling glitches (Akin to the kind you get in emulators like PCSX2 and Dolphin with higher internal resolutions)
This is as best as I can explain it, and my total understanding is ultimately more limited than I would prefer. SGSSAA is something every game engine should have these days instead of MSAA. (But at the same time, they shouldn't do it cheaply like some games do OGSSAA these days where it only super samples certain buffers. So if other effects are fixed by a factor of display resolution. Their precision can't be increased by also super sampling that buffer. Where as with driver/GeDoSaTo, these are all proportionately increased as well. This results in moderately better effects in some games. Such as
Deus Ex Human Revolution's HDR Buffer, and in Alan Wake, you can see in my shot above, the bloom resolution is proportional as well)
(in the case of Deus Ex, this issue isn't present in the original game. The HDR is of lower quality than the original. It's rendered proportional i'm guessing 1/6th or more to the main rendering resolution. Where as originally it is fixed somewhere between 1/2th or less. Resulting in little to no undersampling artifacts such as aliasing, stair stepping,shimmering and flickering)
SGSSAA sometimes can effectively super sample low resolution effect buffers in the current form that it is in the driver as well. Take Dead Rising 2 for example, with SGSSAA,the AA Fix set off and a rendering height of less than 1024px can super sample the Depth of Field and Shadow buffers. Increasing the quality of said elements)
So i'd honestly prefer that if a game has lower resolution effects, that if SGSSAA would be able to handle them as well instead of just running those at 1x or less. Or at least offer an SGSSAA quality option. Simple Low-High switch that runs effects as is at 1x and only super samples the main rendering buffers, or as I described previously.
Well, that was an overly long and convoluted explanation that probably didn't make too much sense for many people.