Maybe you should ask these questions next E3 if th game looks the same.  It clear that the Crackdown that was brought to Gamer is built to show the Cloud based physics engine.  Since this is something totally knew its easy to see that the developer concentrated more on getting this tech to work correctly then worry about graphical features.  You can put this in the same situation as Naughty Dog when they showed the first real gameplay video for UC4 which looked good but nowhere like their gameplay video of UC4 at E3.

Cloudengine has a better than a year of development for the game so drawing any real conclusion on the actualy finish product is probably way to early.  

Saying that, Crackdown as a franchise never was a graphical looker so I doubt that will be an area of concentration for the devlepoer.

They miss out. Not every one can have good things.

What they showed is enough. Crackdown has always been about mayhem, destruction and mindless fun; I just hope they turn all of that up a notch while delivering some cloud magic.

What you see and what you comprehend are 2 different things.  What is being done with Crackdown is not the same as running a MP game on dedicated server.  

First understand that each portion of the game and its environment are processed by multiple different servers.  To understand why it’s called cloud tech is to understand what the term actually means. 

It’s the main reason why you are getting confused with what a dedicated server is compared to what a cloud does.  A cloud uses multiple dedicated servers and distribute the work among those servers.  When load increase, the cloud has the ability to add more servers or reduce the number of servers used for processing.  Servers can be spun up or down based on load and the switch of this process happens in Nano seconds.  So when MS talks about their cloud this is what they are talking about.  The ability to distribute work among multiple servers at the drop of a dime and scale back those servers also at a given moment.  

 MP games that use dedicated servers cannot do anything that I just mentioned.  MP dedicated servers allow users to be matched on that one server and the server handles sending data to all parties but it does not distribute the work among multiple servers nor does it have the capability to spin up and down servers for load balance.

This tech is not new, it’s been used for years in the enterprise.  The new part is that it has not been used for compute work within a game world.  MMOs would be the closes you get and even those do not do what Crackdown is doing with its destructible environments.  Companies use cloud tech like this and send way more data than what Crackdown is doing.  I doubt we will see any difference in real world compared to the demo since the technology is mature.

How much power of the cloud does it have? 1000? 10000? 1 million?

I totally agree.  I really want the developer to concentrate on all of those aspects you mentiond and actually let the graphics take more of a backseat.  I guess I am looking for a fun open world destructble game word then a pretty but sterile one.  I really want to be able to think up and do what we saw in the teaser trailer.

wait, how is this different from other games where destructible environments occur? For example, in battlefield, when you blow up a building, does it not happen on the server side? Does the server simply trigger the event to be rendered on the consoles...as opposed to the server rendering the events like here? Or what about in MMOs where a world event occurs. Are the computers rendering the scripts or are the servers doing it?

This will give Xbox the edge in future game development. If only Sony had some kind of giant server farm that would make it possible for them to something similar if they wanted.

europe? dude wtf are you talking about internet connections here are super fast.