Image Quality Comparison
For the most part, Medium graphics quality doesn't look bad compared to High and Very High, with the biggest difference seen in the textures that look a bit ghastly in some comparisons. Keep in mind that comparing the various quality presets in still imagery doesn't the game justice and many of the visuals aren't fully realized. Moreover, even the highest quality YouTube footage just doesn't come close to what you will experience firsthand.
The most noticeable difference in the above screenshots is the difference between Nvidia's HBAO+ (Horizon Based Ambient Occlusion) and the developers' in-house SSAO technique dubbed 'Broad Temporal Ambient Obscurance' (BTAO).
In my opinion HBAO+ delivers a more realistic looking image and in the top left side of the above images you can notice a tree and a snowy rock face, this is where the difference can be easily seen.
From High to Medium there doesn't seem to be a huge difference to the world but textures are certainly more detailed in High.
Going from Medium to Low there are noticeable differences when playing the game though you wouldn't think so when looking at this screenshot. The depth of field effect is virtually gone and textures are noticeably lower now. The game still manages to look quite good overall.
The difference between the Low and Lowest quality preset is like night and day. Lowest looks very poor and should be avoided (dropping resolution would be a better trade-off).
In the above screenshot, which compares Very High to Medium, take note at the quality of the rock ledge to the right of the screen. There is a significant difference between the presets and this is very noticeable when playing the game. The lack of ambient occlusion and texture quality can also be seen on the much darker side of the image as well.
Here we see very subtle differences between High and Very High, but overall I feel Very High does look much better.
In this instance the difference between Very High and Medium is significant. Granted the Medium quality is still very nice, but if you have an eye for detail then it would be hard to reduce the settings. The textures and lighting effects on the ground are greatly reduced and the city in the distance looks much more realistic with graphics maxed out.
For a more complete showcase of what each setting will do visually, Nvidia's GeForce portal has published a detailed image comparison. We recommend checking out the Ambient Occlusion comparisons (here, here and here) which might depict best case scenarios for Nvidia's HBAO+ usage but it's an impressive showing on a really great game nonetheless.