I don't think that GT5 and Forza aren't good examples. I think we still have a LONG ways to go in order to reach the uncanny valley (I don't think even Heavy Rain has truly entered it), and then we have to consider the possibility of actually achieving such good animation and graphics, that our games manage to get out of the uncanny valley.
While I did disagree with people about the violence in GoW III, I do have a genuine worry, or more like interest, in what will happen as games become more realistic. Will we literally have what crazy Jack Thompson preached, which are murder simulators? How realistic do we want to go?
I know people who were disturbed by Saving Private Ryan (the one part that made me, not sick, but kinda touched/disturbed was when I saw the soldier in the D-Day landing having his intenstines come out. But it wasn't that, which made me feel weird, but the great acting and emotion when the guy screamed "Moma! Moma!" and sobbed. I sorta put myself in his shoes, and wondered how it'll feel to know you're not only physically disfigured/mutilated, but that your existence is going to go), so what happens when Call of Duty implements God of War's zipper technology, but with more realistic graphics, and a realistic context (instead of the over the top ridiculous violence we have in God of War).
Until we actually feel as sick as we will watching a snuff/real film, then graphics haven't improved one bit IMHO.
