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OP, I detect a cynical tone in your post which is a shame since you obviously are cynical but have nothing to backup your cynical point of view. Would it not be more polite and proper to simply ask if this is possible instead of turning what is basically a lack of knowledge into a critisism of Forza 3.

I'm not fully clued up on the matters but you can bet one or two things.

1. Only your car will have 1 million polygons if true. AI cars will certainly use lower detail models, this is standard practise.

2. Not all parts of a car are rendered, occlussion techniques have been used for years so parts of the scene that aren't visible aren't rendered.