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It looks great for a PSP title but you seriously compare it to what they showed for FM3? You're on crack.

Looking at 1:20 the tailpipes are a texture, you can't see into the car at all other than a silhouette, no real reflection on the car (when driving under signs they don't reflect off the car) and the licence plate opening casts the same shadow regardless of light direction. The car's shadow is obviously not a real time shadow based on a light source (hence the 'fading out' look as it extends from the car, the framerate stutters constantly, no car damage at all,

I'd say this looks almost as good as GT4, which looked vastly inferior to Forza 2, and therefore looks an order of magnitude inferior to what was shown of Forza 3. If I owned a PSP I'd buy this the day it came out, which will probably be around the same time as GT5 and Forza 4. Nice try though.