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It's obvious that the majority of the scenes are in game, except for the city scene where the Citroen C4 turns on to the street, which is almost too god to be true (aside from the tram tracks).
BUT, why can't in game people walk like people (even though it's irrelevant to a racing game), and the jet plane smoke trails are no fancy 3D volumetric particle effects, and the dust the Citroen C4 rally car leaves behind is kinda low tech too. So see, it ain't perfect yet.
(Interesting how much Citroen appears associated with GT5 no?)