Shaders are an option that come with all newer graphics cards. It allows for better lighting effects and shadows by shading pixels or some shit. I'm not sure on the specifics, but pretty much every game in the last few years have used some sort of pixel shader. They are just a lot more extreme in TB because of how basic the game was before.
Now to answer your question about some sort of line that defines good graphics from shaders. The answer is no. Shaders are a component of all high end, or even by today's standards, med-low end, graphics. It is not it's own level (above "Highest") of awesome. It only seems like that in Toribash because of how extreme the difference is. You can think of it like an HD filter. Maybe even if you have bad eyesight. No-shaders is without your glasses, while shaders is when you have your glasses on. How good you see is dependent on the strength of your glasses (or in this case, the graphics card).
I hope this helps you, and anyone else who wants to know, understand what shaders are. Feel free to ask any more questions. Remember that I'm no expert, I'm just going off of years of PC gaming experience.