Xenoblade's character models are quite bad, but the World is stunning (and vast. and with seamless transitions between areas and from movement to battle).
By having good (or very good?) character models AND great looking areas, Last Story could best Xenoblade, but I am not sure it could best the vastness of the Xenoblade world.
In the end, it's the gameplay, originality and diversity that count, so regardless, both are must haves in my book (as will be Zelda).
Currently Playing: Shin Megami Tensei: Devil Survivor Overclocked, Professor Layton and the Curious Village
Anticipating: Xenoblade, The Last Story, Mario Kart 7, Rayman Origins, Zelda SS, Crush3D, Tales of the Abyss 3DS, MGS:Snake Eater 3DS, RE:Revelations, Time Travellers, Professor Layton vs. Ace Attorney, Luigi's Mansion 2, MH TriG, DQ Monsters, Heroes of Ruin







