DX8 SHADER MODEL 1.1 VERSION
* Shaders architecture with diffuse and specular lighting parameters + environment reflection
* All lighting components are considering the normal map
* Specular lighting can be tuned depending on material properties (glossiness and strength)
* Procedural animated texturing is available on all shader components (diffuse, normal map, specular mask, environment map)
* Available for transparent materials
* Real time reflection materials on flat surfaces
* Complex character lighting with average compensation and translucency
* Filtered soft shadow maps with bleeding removal
* High resolution and no compression on character normal maps info
Some newer games are requiring the shader model, and it seems as though your card may not support it. The shader model is something similar to T&L; if your graphics card doesn't have it, the game won't work.
And No-one "has it". It's just a type of code that is being written into games, and if your video card supports it, you'll see the results in game.
Hope this helped