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I forget who it was, I think he was some game developer with Sega, recently mentioned how it's possible to make prettier graphics with 16 colors than someone using 1,000 colors (I paraphrase). 

I don't think you can pin down what makes great graphics since everyone is different in what they like.  I personally think great graphics are an even mix of realism and art style.  Some would prefer pure realism (like Crysis) and some pure art style (such as Wind Waker and Okami).  I think the best looking upcoming game is Super Mario Galaxy.  It looks realistic while not losing its bright, colorful, and artsy presentation.  Others would obviously disagree but that's why I think it's impossible to definitively say what constitutes great graphics.