Anti-aliasing is an important technique used to reduce the appearance of jagged edges in raster based graphical systems. Traditionally, the cost of using anti-aliasing is significant, and usually scales with resolution. The Xbox 360 used a particular form of anti-aliasing known as multisample anti-aliasing (MSAA). While this technique reduces the computational cost of supporting the feature, it significantly increases the required storage space.
Dynamic coverage anti-aliasing is an improvement on multisample anti-aliasing that reduces the necessary storage space by about 50%, without any noticable loss in visual quality or any increase in computational costs. This reduction in storage space is particularly significant on game consoles, where video memory is a precious and scarce resource.
For more information about DCAA, check out my patent on the invention, or this lecture that walks through the basics of the algorithm.