Pretty much everyone would agree that the difference between N64 and PS2 graphics is more significant than the difference between PS2 and PS3 graphics.
I wouldn't. Like I said, they are probably about the same difference. If you actually go back and play some PS2 games, which I do quite frequently, those games don't look as good as memory/nostalgia makes people think they did. Hell, some people think that the Unreal Next Gen Demo didn't look too different from this gen, but the fact is, it looks leagues ahead of this gen. Of course, from the PS2 era on, developers have been able to use tricks to make a game look better than it truly is.
Sure, if you look closely at games you can spot similar differences between each generations, but most people don't do this. Hence why the difference is not perceived as being the same by the massmarket, but rather getting increasingly smaller with each generation.
But, you don't even have to looks closely. Going from GOW2 (one of the best looking games on the PS2) to GOW3 is no less impressive than when we went from MGS1 to MGS2. In fact, many have said the graphics of GOW3 look on par, if not better, than the CGI cinematics from GOW2. I would have to agree. Where we have come to this gen in terms of polygon count, lighting/shadowing, and textures is nothing short of amazing. However, I think many let nostalgia take over when they try to say, well this gen doesn't look all that advanced when compared to last gen.
lets put this into perspective of a smaller screen on a handheld:
