http://www.bit-tech.net/gaming/2005/09/14/lost_coast_screens/1.html
The coding team at Valve certainly sweated blood on getting HDR right for Source: in development since 2003, they went through no fewer than four different approaches to the HDR puzzle. Each method had pros & cons, so while one provided the overbright detail needed for blooming, its performance was "so-so" and it broke Multi-Sample Anti-Aliasing (MSAA). As cool as HDR is, Newell was adament that users would not have to sacrifice the ability to run AA in order to gain access to HDR.
By the fourth interation, the lads had cracked it: MSAA worked; it worked on all DX9 hardware, with reasonable performance on even a Radeon 9600; indeed the performance was the best of the four methods, with only a small performance hit over Half-Life 2's LDR solution.
To clarify, then: the HDR works on Shader Model 2 and Shader Model 3 hardware, and you can run it with anti-aliasing on.