Not really. I do think the tracks backgrounds will look better in the full version though.

I think there will be some technical improvements when GT5 is released but nothing mind blowing.
As Polyphony gets better at coding for the PS3 (as all developers will) and get more out of the cell processor, there will probably be better AA, smoother frame rates, better lighting, and crisper textures. It's obviously not going to be a day to night difference but GT5 will probably look and run better.

And i think GT4 will end up on the PS3 4-5 years down the road, nearing the end of the PS3 life cycle.

No. Other prologue titles generally looked the same as the eventual full releases. There will be tweaks and small stuff, and maybe even some stuff that's very different yet not clearly better.

The gap between a GT prologue and the full released is where the developers add more cars, add tracks, tweak physics, work on tuning effects, etc. The graphics engine is set and won't be significantly reworked. If they were going to do any real major upgrade in the graphics department, they'd be calling this title GT5 instead of GT5: Prologue.

As for GT6 making it onto PS3, I think so. There's certainly a chance it won't (Polyphony isn't the most timely developer), but there's a lot of time left in this generation, and they'll be able to use some GT5 assets as a base to shorten the development time(as has been the trend in making two games per system).

There will be minor fine tuning but it will be the same gameplay.

GT6 on PS3: Yes
Graphical Update on GT5: Yes

Yes but the thing is how long will the PS3 be around?  I think both the 360 and the PS3 will be around for a long time to come, as they are both turning profitable (360 a while ago, PS3 in the near future). Console's with large sunk costs that reach intermittent profitability are kept around for a long time (e.g. PS2).  I've never understood PS3 fanboys that say the PS3 will have a ten year life-cycle but that the 360 will be shut down in two years. 

You can't have it both ways.  The business model for the console's is virtually identical (although Microsoft has arguably implemented theirs better thus far). 

GT5 prologue has amazing graphics, the final version will probably mainly include many new cars and tracks, but the game engine will advance as well and should include stuff like car damage, prologue may see such updates as well through downloadable enhancements as the developing company stated they are nearly done negotiating this addition with the car manufacturers.

Overall graphically I think there's not that much need for improvements, the cars look absolutely breathtakenly realistic, much better than anything we have ever seen in a realistic driving game ever before, some tracks can have a bit more polish, more special effects and such.

Wait. Prologue doesn't have damage?

I always thought the reason Sony couldn't have damage in GT but Microsoft could have it in Forza was that GT had more cars so it was too much of a legal hassle to sort out.

Why is this a problem with only a small number of cars in Prologue?

no i dont think so

It's not a big technical problem, the cars in Gran Turismo are based on the real car models from the manufacturers. The developers need to ask for permission to destroy their cars, some manufacturers have been slow to warm up to the idea, but the devs stated they are sure the legal work will be worked out soon.

For a game like Motorstorm they didn't use real car models, just car models inspired by existing models. So those devs could do whatever they want with these virtual cars, like they did.