What is this Super Mario shading technique (the edge glow) called? It can best be seen on the legs.
2 Answers
Rim lighting.
http://blog.wolfire.com/2009/09/character-rim-lighting/
Basically you increase the brightness of a surface the more the tangent is pointing away from the camera.
Looks to me to either be the Fresnel Falloff shader effect or some variant of a Rim Lighting. The pixels near the edges appear to be just brightened. You can see a similar effect described here.