It doesnt matter what the architecture is. Devs will always find ways to make the games look better up until the end of the console's life span. Even in the days of the NES the difference between the original Super Mario Bros and Super Mario Bros 3 was an amazing progression for such simple hardware.
If you want to make the argument that the 360 has graphically improved more than the PS3 during its current run I could actually agree. It only makes sense since the console has been out longer. However, the PS3 still has the better graphics in my opinion, and I base that solely on the preview of Drakes Fortune 2. That trailer does for me what the RE5 trailer did a year ago, though that game was a multiplatformer.
In any event I expect more to come from all consoles.
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