The images look great, and honestly, looking at some of the real-time cut-scenes from Metal Gear Solid: Snake Eater, I don't doubt for a second that it will possible to do that in a few years, but look back in all your old EGMs and NextGens at the blurbs about Project Reality and Project DURAL and all the amazing feats these things were going to do. They always hype it up to insane degrees, then the things come out, and the reality is a little less than promised.
I one time read an interview with Ken Kutaragi where the interviewer asked him when video games will be able to do graphics so realistic that you couldn't tell the difference between reality and the game.
He responded that the system would have to be approximately 1,000 times more powerful than the hardware inside a PS2.
We have a while, folks.
(On the other hand, a new television was recently tested in Japan where the resolution and picture quality was so incredibly realistic that people watching it vomited due to disorientation... pretty nuts)