You don't need to use the launch option thing anymore if you are using DX10. You can just select it when you launch the game from steam. If you want to use the shader 4 switch, just type -sm4 in the box. Thats a minus sign then the sm4 and then click ok. Shader 4 also forces DX10 so you don't need to use that switch as well. Since teh update I've just been using the alternate launch option for DX10 and its working great.