Well, basically, Shaders are programs that run on your GPU that are responsible for producing pretty pictures from raw data. The original mediavps shaders are built to emulate the fixed render pipeline as closely as possible (with the addition of normal maps, obviously).
These shaders, on the other hand, move the lighting processing from a per-Vertex to a per-Pixel model. Previously, lighting values were only generated for every vertex in the on-screen geometry and then interpolated between adjacent vertices. These ones process lighting much more accurately. In addition, the previous shaders only did normal mapping calculations for the strongest light in the scene, these ones use normal maps for all lights.
Now, to get these working on SM2-level cards, it was unfortunately necessary to cut down on the number of lights being processed. On SM3 or better cards, these shaders will render all 8 lights, on SM2, only the 2 strongest ones are used. That's the point I would like to see addressed; the more lights we can get on SM2, the better (with the added hope that any optimizations done for SM2 will allow these thingies to run faster on SM3 as well).
But the point of this topic is for others to post shaders as well; just to get some variety going.