Scoobes on 03 April 2011
The only major leap in AI that I can think of was when the original Half-Life was released. Like you said everything else was small incremental leaps but in Half-Life the soldiers actually did what you'd expect soldier to do at a time when most games still had enemies running into walls.
I think Heavenly Sword on PS3 did something clever with the SPUs on PS3, splitting the AI into "groups" but that's not particularly transferable unless you have a game with huge number of enemies. Killzone 2 (haven't played Killzone 3) had some fairly intelligent AI to the point where the bots sometimes acted human-like.
