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I haven't played the game on both platforms, but the video comparisons I've watched indicate the PS3 has slightly better looking terrain, clearly superior draw distance, but much worse character models. In any case, the difference is what you'd expect when you work on a game a year longer, and hardly anything to parade about one way or the other.

As for being game of the year, it was originally released in 06, and it's in too much of a niche genre to be universally recognised as the game of the year. Probably the best RPG on a console after Mass Effect, but there isn't all that much competition. Unless you really get desperate and count Final Fantasy clones as RPGs of course, but frankly that should be illegal. =P