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Most games will have the basic graphics only improve a little, instead we will hopefully see things like - better draw distance, native 1080p, less pop-in, better/more AA, more dynamic lighting and higher res shadows. 

 In my opinion instead of pushing the graphics envolope, the next-gen consoles biggest improvments should aim to fix load times (shorter and fewer please), patches (no more day 1 patches let consoles download them in the background instead of when i boot up a game), complete intergration of features added this generation( taking screenshots, recording video, uploading video to youtube, custom in-game music), better management of game data (i want folders that separate game data and game saves via games not just throwing it all into folders game data and game saves). 

 Ohh and i'm not sure what live is like when buying stuff (don't own a 360) but on PSN i want to have 2 separate download list, everything(demo's, trailers, etc) and bought items(maybe even divide it up, games, dlc). As for Wiiware, DSiware, DSiXLware and 3DSware - i want 1) a much faster service, 2) better interfaces 3) an account, having games tied to a single console sucks.