CgFX and HLSL shaders are high-level programs that allow you to combine a number of multi-pass vertex and pixel shading effects in a single file. Softimage's built-in CgFX and HLSL parsers support nVIDIA's CgFX file format, Microsoft's FX file format, and COLLADA's FX file format.
Any effects files located in the user, workgroup, or factory locations are read directly by the Softimage CgFX or HLSL parsers. These parsers create shader definitions that define the name to display in the preset manager and in which category to put the shader definition. Then, when you drag a preset from the preset manager into the render tree workspace, Softimage builds the shader node with its input and output parameters, including data type, restrictions on connections, default values, etc. The parameters and variables specified in the effects file automatically generate user interfaces that allow you to tweak parameter values and pass additional data from Softimage to the effect.
You can create realtime effects for the objects in your scene using the Softimage-provided realtime CgFX and HLSL shaders. However (and more importantly), you can integrate your own existing effects files, or author new effects files directly within Softimage using the realtime shader wizard.