It has some of both. Gears 2 and 1 for that matter are quite impressive.

A few cutscenes in MGS4 are apparently pre-rendered instead of being realtime. Most are realtime, sure, but a few aren't. The end of Act 3 is probably the most obvious part - even I was wondering about it the first time I played despite only trying to enjoy the game and not concentrating on the technical side. Oh, and I was playing on a SDTV. Still, impressive graphics overall and it's very likely that anyone claiming that it's the cutscenes taking up all the space should simply shut up.

@Zkuq

There are no Pre rendered cutscenes in the game.

Not sure I get the point. Most if not all of the cutscenes in Gears2 are in-game (in fact you are partly in control for many of them) - certainly they are in no way "disconnected" from the rest of the game.  The one particular cutscene you showed (opening sequence about 30 minutes into gameplay) may or may not be pre-rendered - but I can't see why it matters either way.  Graphically they are comprable to one another (from your youtube clips, which is of course hard to judge - I don't have MGS4).  I may try renting MGS4 since I have a PS3 - but honestly - WTF are those box-like things with legs?  Looks just kinda weird to me.

In fact MGS 4 is an awesome game, i really think most of it's cutscenes are in-game graphics, the only one i'm with doubts is the one where they show the two eggs that sunny is cooking, that seemed too real to me, thanks to the shine one the eggs, and the reflections on it's surface, but i can be wrong ;).
Also, i don't know about gears2, but gears 1 i think it's almost all in-game cutscene, just like the HL one's and mgs 4 one's too.

Then where do the compession artifacts come from? The game adds them by itself to make it look like a video file? Or it's some kind of an effect that just happens to look like a compression artifact? Say what you wish, but I think there are a few pre-rendered scenes. By pre-rendered I don't mean CGI; I simply mean it's not realtime. Even pre-rendered stuff can be done by the game engine. Anyway, I thought it was pretty much agreed that there were a few pre-rendered scenes when this was argued last time.

Is it even important whether there are a couple of pre-rendered scenes or not if most are realtime anyway?

once the snow storm wheather dies down here in my town, I'll get MGS 4.

Gears 1 which I own for PC definately has quite a few FMV cutscenes. Somtimes it looks like they took CGI and cutscenes and In game mixed them togeather as one big FMV. But this is off topic. Gears 1-2 look friggan sweet. But I'm talking about mgs4 here and how every cutscene is ingame.

Oh, thanks for pointing that one for me Steroid =) i have gears 1 for the pc too, and i didn't noitce the FMV cutscenes, i thought they all were made with the game engine.

LOL!!!!

Thats Gears 2 video is IN-ENGINE!!!!

THE POWER OF THE XBOX 360, CONVINCING PS3 FANBOYS REGULAR GAMEPLAY IS FMV!!!!