A: There are things one platform cannot do and the other can.
Note 1: The Xbox 360 sucks doing deferred rendering, the PS3 is quite good at it.
Note 2: GT5 doesn't have many particle effects, not a strength of the PS3.
Note 3: The Xbox 360 can implement MSAA at least twice as efficiently as the PS3.
B. There are some assumptions that shouldn't fly.
Note 1: Unreal Engine 3 isn't fully optimised for the Xbox 360, it uses deferred rendering in some parts which is not ideal and it doesn't make use of the Xbox 360s ED-Ram like a custom engine would. So no Gears of War 2 isn't the peak of Xbox performance.
Note 2: There are very few exclusive titles which use a custom engine on the Xbox 360, so comparing custom engine games to games which are built off UE3 isn't representitive of the complete Xbox 360 performance. Nor could you point to a game which has been given such focus on visuals that has been developed over 4 years on the Xbox 360 platform.
Note 3: That the peak of performance has been reached on either platform. It hasn't obviously.
C. There are definate areas which promise marked improvements of games on both systems.
Note 1: The PS3s Cell is the obvious choice, but lesser appreciated would be the streaming and design work of games like Uncharted, getting games to run off the HDD and make better use of it.
Note 2: The Xbox 360 tessellation engine has "just" been unlocked to developers. This promises to reduce ram usage, increase the complexity of models and animations possible on the console and possibly reduce space by both allowing for better "real time cutscenes" and with a little procedural generation of terrain features. This is similar to a lot of the RSX -> Cell optimizations on the PS3. I won't go into detail here because it gets complicated. 
Tease.
