Nah, we've seen the biggest jumps in graphics already. Graphics are so impressive in the first couple of years of the generation because people are used to games being played on the 7 year old hardware of the previous generation.
The further you get into a generation, the harder it becomes to get the "WOW" effect of graphics.
Case in point: (interchange Uncharted and Gears of War here) when GeOW first came out, people went ballistic over its graphics. Since then, multiple games have been released that look better than Gears.... but because the jump wasn't that big, no body cares. Killzone 2 was a little different because of the hype that's been going since before the PS3, the massive development time, and the huge budget. Personally, I think they should have moved some of those $$$ away from graphics and into hiring some decent voice actors. It comes to something when you actually have to use the subtitles to understand a character (Rico).
To summarise: will games look better? Yes. Will we care? No.
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