I am having similar issues, though I think it is driver related, nothing to do with LFS. I had it before patch Y as well and have the same issue with other games.
What works for me is, ALT+TAB and then setting the catalyst AI to disabled from standard and vice versa if AA+AF gets lost again. Though on a new reboot, selecting optimal quality (that is 4xAA, 16xAF) from the standard settings menu works always, after shift+f4, alt+tab or exiting lfs, it is lost, but can be "recalled" with the above mentioned.
In XP I have to do the above, in vista 64bit it works without any problems though.