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As of 2008 Gears of War 2 probably had the best graphics on consoles. Followed by MGS4, COD4, and GTA4 (lot of 4s there).

For art direction I'd say Bioshock and Metroid Prime 3 were the best.

Of course Crysis blows all of them out of the water on a technical level, but it was PC only at the time.