"Frostbite 1.5 on PC is designed for DirectX 10 as a base, this enables us to easily support all the advanced graphics features that we use on the consoles, and much more! DX10 is a very modern graphics API and gives us a lot of flexibility as a developer.
DX10 has one unfortunate draw back though; it is only supported on Windows Vista and Windows 7, not the now 9 year old Windows XP. And as we have a big PC fan base, where not everyone may have transitioned over to Vista or Windows 7 yet, we have also added a rendering path that uses the old DirectX 9. The DX9 path is quite efficient but lacks some of the features that we have on DX10 like anti-aliasing and HBAO.
For everyone with the new generation of graphics card, like the AMD Radeon 5xxx series or the upcoming Nvidia Geforce 4xx, we've also added support for DirectX 11. The primary uses of DX11 in Bad Company 2 is to soften all the dynamic shadows as well as to improve performance in general with a few smaller DX11 optimizations that we are using.
The detection and usage of DX9/DX10/DX11 is done automatically, the game selects the highest possible version available with your graphics card and OS. If you want to force a given path you can do that in the Settings.ini file by setting 'DxVersion' to any of these options: 9, 10, 11 or auto (default). "
- Battlefield Blog