Converted to MGE XE by zilav: https://web.archive.org/web/20200216134646/http://forums.bethsoft.com/topic/1462188-mge-xe-shaders-library-and-development/?p=22735249
Modified to exclude sky and water by Kamikaze.
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The shader was originally converted and posted by zilav on the old Bethesda Forums. I think that it complements the look and feel of the game. I modified the shader to exclude the sky because it looked ugly to me, and the water because it didn't seem to be affected.
To use it, add Watercolor to the top of the active shader list in MGEXE.