Torchlight doesn't seem to have very heavy requirements and looks great already, but for those of you who want to use the full potential of your machine, you can locate the settings file at 
 
C:\Users\User\AppData\Roaming\runic games\torchlight for Vista/Win7  
 
C;\Documents and Settings\User\Application Data\runic games\torchlight for XP 
 
Inside are several settings that you can change. You can increase particle density, shadow resolution and anti-aliasing. You can even turn off your pet or turn on invisibility mode. You can also enable the console to use cheats but I haven't fully figured out how to do that yet.  
 
Remember to backup your file first, and make the one you are editing "read-only" so the game doesn't revert any settings.