Mendicate Bias on 13 July 2009
The biggest things holding back graphical development for the 360 have been developers using the unreal engine as a crutch and the problem stated in the op where developers had to use the consoles ram to run their tool kits.
With the new engine specifically tailored for the 360 that MS released and these new 1gb 360 dev kits I'm thinking were going to see some really big graphical developments for future 360 games.
It's going to be interesting how the graphical comparison between the PS3 and the 360 holds up in 2010 and beyond.
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