The texture is LB Photo Realism. When I first saw this thread, there was only the last picture. If I'm not wrong, the main idea has something to do with the last picture. I too, do not get it.
Whoops I did forget to credit stuff. Zabriel is spot on on the texture pack and I also used http://www.minecraftforum.net/topic...le-shaders-glsl-shaders-dynamic-shadows-more/ for the beautiful shading. To the artists.