The gameplay looks ultra-smooth for some reason, the way the character moves around is excellent.

The graphics are very strong, some more polish on the textures, and a more complete animation of the grenade throwing would be nice, but I'm really quite happy with the look of this.

you dont understand the development process do you? Killzone is going throught the same steps that Wii Sports and every other game on the market has gone through. And yes there are that many builds, actually more.

Any developer can take what they have made piece it together and make a fully running demo. Look at Gran Turismo HD. That was a preview of the engine with early models and textures from GT5. Essentially it was a demo for the pre-alpha of the final game.

Also companies show things off like this every E3. Heavenly Sword and Eye of Judgment have been available for play since 2005? and they are still in development and will be releasing in a few months.

The Killzone devs just decided to not show their latest builds yet. They let us view their earlier builds. During the dev process devs make a working game to test for bugs in the coding. The build displayed was probably made in December and they just took and cleaned it up to run correctly.

Yea, a lot of times when you hear that editors of a website got a game in their office to try out from the developers, it's probably just the latest 'build'.

Take making a custom scenario in a game like Age of Empires for example. You work on it and once you get to a point where you want somebody else to judge it, you give that person the latest 'build' of your work. As you progress and finish more and more and then want to have it tested again, that's your next 'build'.

There is also the E3 2006 MGS4 trailer that ran with a really poor frame rate, the game was tweaked and when the next trailer came out on that newest build, the frame rate and such was much improved. Then, they used a more current build to remaster the E6 2006 trailer, fixing the frame rates and adding subtle effects as well.

I wouldn't take it as saying the game is suddenly going to look 200% better, but it will be improved as tweaking, bug fixing, and all that other jaz get done.