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Ripped from my Chron blog:

Don't ask me why Turn10 did it, but they did. The Forza 3 demo stinks. There, I said it. The demo, which allows gamers to take a spin on one track - just one track - with a handful of cars - disappoints. It's not a taste or even an appetizer. It's lacking. It gives gamers a race and clocking in at 1.2gb, it's not a good return, IMHO.

Now, the actual game? Full of win. I can't stop talking about this game. It's a game that will take hold of you, make you hang on by the skin of your teeth and doesn't want to let you go. The demo and the game are as different as night and day. The demo dumps gamers into a race with a car of their choice. That's it. It doesn't showcase the depth of the game - it doesn't let gamers dabble at the nearly endless choices to outfit your racer. It doesn't even let you listen to the whiney English bloke who sounds sooo much like my own butler - where were you a couple months ago when you called in sick? No, the demo was firmly in neutral. I love racing games - Test Drive Unlimited on the PS2 and the 360 are still the kings IMHO (It also helps that I'm in the PS2/PSP versions of the game, but that's another post) - and had I played the demo before playing the retail copy, I would have likely passed on Forza 3. But thankfully, I played the retail version first and absolutely loved it.

I think Turn10 should bold the phrase "This demo does not reflect the final retail product" because it doesn't. It's like comparing a T-ball team to the Atlanta Braves. Yes, it's baseball, but goodness. This demo is visually stunning - but only offers maybe 2 percent of the actual retail product.

My advice? Go ahead and play the demo, but realize the final retail version of Forza 3 will completely blow the doors off the demo. It will be like driving a Yugo on I-10 at top speed and watching a Porsche Carerra GT blow past you without even trying.

And worried about the installs? Don't have a HDD yet for your 360? Scared you are going to miss a lot of action? Don't be. You can have fun with this game without the second disc. Yes, you won't be able to race all of the cars and tracks, but if you will still be able to cruise and compete without it.

Source: http://blogs.chron.com/gamehacks/2009/10/forza_3_impressions.html