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Not as good as you would have with an HD TV, but graphics will be slightly improved from the original XBOX. In my opinion.
It plays the newer Blue Ray disks and improved the problem of pixelated ,or poor graphics. Also solved problems with incapatibility.
3D Analyze is a software to emulate various 3D graphics such as shader 2.0 technology. It has several options to emulate but is currently a very outdated software. Many find it useful in emulating grpahics that certain games require (when the user's graphics card simply doesnt support it). You can download it from 3dfxzone.it, see the related link.
The Shader Model is like software built into your graphics card. If your computer says it needs v2.0, you'll need to buy a new GPU.