Setting the NURBS Tessellation under the render menu has always been a hit or miss operation for me.

I suggest you select your fillet, and enable the advance tessellation check box in the attribute editor. Then, crank up the per span # of isoparms a bit. I personally don't like going above 10 for either U or V unless I'm going to be doing extremely close up.

Other things that have made a big difference for me are under the Circular Fillet Options box, lower the Positional Tolerance to 0.0010 and my Tangent Tolerance to 0.0100.

Also, remember that when working with nurbs, you may need to rebuild your surfaces once in a while.

Hope that helps.