I believe them when they say its in game footage, yes the engine rendering a cutscene. Those who are drolling over the graphics and claiming it to be the next coming probably should bookmark this tread for later. So when the game finally comes out and they see how the graphics look nothing like it did at e3, then maybe they will learn how not to be so dense.
Happens all the time. As a rule, one should stay objective and practical. That is to say if you believe a console which consists of a low end jaguar core and Radeon 7xxx series gpu will magically pump out cg movie quality visuals then you probably need a reality check. It doesn't matter if the system has low level access to the hardware, that doesn't magically make mediocre hardware good.
Realistically, expect U4 to run at 1080p/60fps with similar visuals to the ps3 games with a bit higher texture resolution and better lighting.