Both can be great. I love photorealism, Uncharted and MGS4 just wouldn't be the same without it. It makes you feel like you actually are the character.
Stylised video games make you feel like you are experiencing a work of art. However, some games take it too far. In fact, your example. Mirror's Edge.
The entire city is white and red! It's hideous! Really, really hideous! The white shines in your eyes, and the red sticks out like a sore thumb. Of course, the graphics aren't the only thing wrong with that game, let's not forget the ridiculously short length and the fact that the story is never really explored.
Okami, Valkyria Chronicles, these all look great, VC in photorealism would be hideous. It just takes away from the 'artistic' feel of the game.
(Former) Lead Moderator and (Eternal) VGC Detective 
