It’s probably best explained with pictures. First, for the Line Tool, the option box for anti-aliasing is at the top of the window:

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These lines were created with the Line Tool with the anti-aliased box NOT CHECKED:

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These lines were created with the Line Tool with the anti-aliased box CHECKED:

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See how the first example had jagged edges where you can see ‘steps’ in the line? See how the second example has extra gray pixels that smooth out the line?

Here is a close up of those lines overlapped:

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Pencil vs. Brush:

The Pencil Tool IS NOT anti-aliased and will give you jagged lines. All pixels colored with the pencil tool will be 100% the color in your foreground swatch (i.e. all black with no gray pixels).

The Brush Tool IS anti-aliased and will give you smooth lines. Some pixels will be lighter than the color in your foreground swatch (i.e. mostly black with gray pixels along the edges).

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Other tools with an Anti-aliased checkbox:

• Lasso
• Magic Wand
• Paint Bucket
• All the other shapes (Circle, Square, etc)
• It’s implied in the Text options (the “smooth” setting = anti-aliasing)
• Probably more that I haven’t noticed….

Point is that anti-aliasing everywhere so definitely keep it in mind!!