I've been using 16xAF for Unreal Tournament for years. Even with my 7-year old computer, it doesn't cause the least bit of lag. I keep AA at 0, because it really doesn't change much - unless you sit there and stare at corners and take screenshots to compare. AA also lags the game MUCH more than AF, and tends to mess up the font in the menus. The biggest noticeable difference comes from AF, as seen from the screenshots in the first post. Things really clear up.
My personal recommendation:
AF = 16
AA = 0
Here is something else worth mentioning for people that are experiencing tearing or mouse lag (or mouse latency). In your video card settings, force V-sync to on, and turn the pre-render limit to "3" (this removes mouse lag caused by V-sync). Next, go into the game and turn on direct mouse input. You will now have no mouse acceleration, no mouse lag, no tearing, and movement as smooth as butter.
Edit: For the technique above, I also recommend turning off triple-buffering. This causes lag in Unreal Tournament. The much better solution is to pre-render the frames (pre-render limit).