Could be the projetile class that determines this. I'm pretty sure that granade doesn't use an animated mesh. Plus animated mesh shadows aren't much more detailed then normal shadows. The shadow mesh for the banana projectile in my mario kart mod for example doesn't have a high def shadow like shown in that screenshot. The banana projectile uses an animated mesh for a shadow since it has some animations so it
Also perhaps it's because of the distance of the granade from the ground?
This sounds like a stretch, but you can try changing the detail level of the ground hieghtmap. Perhaps make a higher res heightmap file (the game does support larger hieghtmap images). Make it something really large like 4096x4096. Don't change the size in the terrain con file. Just the heightmap file. It shouldn't result in a change in the heightmap's detail ingame, but it could increase shadow detail perhaps? It probably casts a show onto the hightmap image and since that image is always really tiny, the shadow is all pixalated. Also try a hieghtmap size that is a double of 4096x4096. That is the combined resulution of all the ground textures when they are stitched together.
Also note that BF2 hightmaps are usualy double the res of a BFV/BF42 hightmap and the shadow meshes in BF2 are higher detailed.
EDIT: lol try to avoid using 8196x8196 sized hightmaps...the result is a 128mb sized raw file.
EDIT: Dam can't seem to resize it above 2048 without BF42 puking all over it.
