Land shading has nothing to do with landscape shadows.
Shadows can only be turned on/off.
Shading controls the way hardware shaders render the terrain textures and how landscape reflects light (Do you think terrain is too happy greenish?, turn shading to its best and behold beauty). Shading is all computed in gpu, so it is a killer in ancients video cards and as it is calculated for every pixel performance is very dependant of resolution you play: For example you could play with the better shading settings in a very old gpu if you play with a very slow resolution 300x400 or so XD. So better shading is better and detailed terrain ilumination not shadows.
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