The E3 demo has strong AA, enviropment shadowns, no motion blur... that's just to start. The video showed yesterday is a big disapointing to be fair even for Forza fans... download it (570MB) and watch how the IQ is not like the E3 demo.
And about the best lookin driving game... DriveClub is looking far better than Forza 5 right now... how the things changed, no? E3: Forza 5 cleary winner... right now? DriveClub looking better.
I think DC has beautiful lighting but is no where near forza in the looks department. Will have to wait until launch to make comparisons.