The final game will support both DX10 and DX9, but this demo is a demonstration of what the final game will look like in DirectX 10. The demo features all the visual effects and some of the highly detailed models that will be available in the game.
The main DX10 graphics features of PT boats: Knights of the Sea tech demo-benchmark:
Advanced ocean rendering
Reflections, light beams and advanced transparency
Advanced HDR for gunfire and sun reflection
Discuss the benchmark here: http://www.pt-boats.net/enforum/