Hi all,
I couldn't find a dedicated thread to the terminator bug so I thought I'd start one.
I have found a couple of interesting things that appear to result in this bug, or at least make it so visible that it's noticeable.
1) too strong bump maps (how strong is too strong? no idea).
2) having a modifier stack where you have Editable Poly > Turbosmooth > UVW Map. If you select the middle Turbosmooth mod and hit render you will get terrible terminator shading. If you select the top UVW Map mod the terminator shading disappears. I think this could be a bug? I would assume that max would automatically always take into account the topmost modifier on an object, but apparently not. So, in this instance, because it's not taking into account the UVW map the bump map is probably way too large on the object and this is causing the terminator shading error. As soon as I disable the bump map the problem disappears.
So, if you have tried to add 1-2-3 turbosmooth to your object but you are still getting the terminator shading error when rendering, make sure you have selected the topmost modifier on your object and not left it "floating" on the tsmooth mod, which would screw up your mapping.
For what it's worth, this is a major issue for us in every project and we need to find a proper, reliable workaround if you guys aren't able to "fix" it within the engine. We understand that shading like this is inherently a non-physically-correct thing and so it's tough to fix, but it's a real killer for us.
Cheers,