Gballzack,
If there is still just as much on-screen, and the framerate stays the same, the CPU is still processing just as many objects moving just as many times per second; the perceived "slower" speed of the objects is meaningless. Slo-mo combined with a purposeful framerate drop is one thing, but thats not what is going on here, AFAIK.
Furthermore, even framerate drops do not indicate that the system is nearing the max of its processing power, just that devs are unfamiliar with the system. Throughout the life of the system, devs will write more and more efficient code, allowing more and more visually elaborate games with less and less visual glitches. The PS2 really didn't approach the height of its power until 2005-present, and PS3 will likely take 10 years to tap according to everything Sony have said.
The traditional Wii fanboy tack is supposed to be that PS3 is TOO overpowered, overshooting the market and unable to tap its power until deep in the generation. Not that developers are magically exploiting the system's power with launch games. But then, you're a nut.
"[Our former customers] are unable to find software which they WANT to play."
"The way to solve this problem lies in how to communicate what kind of games [they CAN play]."
Satoru Iwata, Nintendo President. Only slightly paraphrased.