No. It's probably getting pretty close though. UE3 is very good (and I think most people will agree that the best looking XBox360 games use it), but it also has a lot of technical issues on both consoles. For example, I just played Mass Effect for the first time last night at a friend's house (awesome game BTW). But there were a ton of graphical problems with the game from screen tearing to framerate issues to texture issues.
When these consoles are having a hard enough time keeping up framerates in games like Lost Odyssey, Mass Effect, Metal Gear Solid 4, and others, it's hard to imagine that there's a ton of extra power just lying around. Of course, there will be optimizations as people get more familiar with the architecture, but overall I think that the current crop of best looking games is what we should expect. Just slightly better with smoother framerates. I don't think it will be like the PS2 where the first games looked quite literally like crap compared to the games that came out late in it's life.
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