Yes, it is in-game code, the pic is rendered instantly (but I am not sure for internal resolution; if you take the driving shot direct it is 600p internal, but if you save that pic to HD and play it later it could be 720p internal). Driving is 2xaa, photomode is 4xaa. There are some post gfx (color change, dof...) which you can adjust, but cars and scenery are from game. I will search bizarre forum and post something later.
Animation has full of problems (blur, lod, texture fill). I am sorry that Bizarre did not have the same dev time as Bethesda has.
I am still questioning the native aspect ratio; is native 800x600 (4/3 ratio = ~1.3) or 1020x600 (16/9 ratio = ~1.7). If it is 4/3 ratio then native pic is really compresed when rendered (and then upscaled to 16/9 ratio, 720p), which could (I think) explain problems with textures pop.