Champions Online is a pretty game. With that said, the graphics are nothing ground breaking. If the graphics are better than CoH, it is not by much. The power effects show evidence of a few more advanced high end graphical features, but that is minor at best. It is worth noting that the CO engine was designed from the beginning to support power customization, which is certainly a plus.
RECOMMENDATIONS: By default, the game comes with "comic book style outlining" enabled by default. In my opinion, this feature makes the game look terrible. It causes things to have a washed out, hazy look. I highly recommend that you turn OFF the comic book style outlining in your graphical options.

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I also recommend turning off shadows or at least turning them down. The performance gain is huge, but more importantly the game just looks better. Shadows are really overdone and are incredibly obscuring of the otherwise nice looking environments (and faces).