Greetings,
Another possible cause is your Anisotropic Filter settings. Low settings will reduce the "good circle" while higher ones will make it larger at the expense of frame rates, depending on your equipment. This is often times most noticeable in FPS games where the "good circle" isnt a circle at all but instead a half of a circle.
What is going on here is how the textures are loaded to your video card. Textures that are far away are rendered as lower res textures than those up close. Anisotropic Filtering is like Anti Aliasing in that it can help reduce textures jagged lines but Anisotropic Filtering does this without blurring the texture. It is most helpful on textures that are at angles and distances like the seas in SHIII.
Anisotropic Filtering and AA are really concesions to video cards that lack the power to render these textures at high resolutions with smooth frame rates. Perhaps in a couple years when GPUs become dual and quad core as well as being equipped with the required memory and memory bandwidth availability these will no longer be needed.
Hope this helps.
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