Ultimately, and I hate to be pro-MS about it, but the primary reason Oblivion looks any bit better (and to me, it doesn't look much different except for slightly better draw distances), is due to them having an extra year to work on tweaking Oblivion to work better on the PS3.
Any game that gets extra dev time will look better, atleast in a typical sence. However, it does show that the PS3 can offer better graphics if more time is taken :)
Back from the dead, I'm afraid.







