From what I've seen tyres get deformed and can also tear & shred during massive crashes like in NASAR, the deformation of super-cars is as real as it gets. I've also seen rain in action and it truly blew me away. The individual droplets of rain pouring down on the windshield actually cast shadows on the top of the dashboard and the physics during rainy conditions become ultra hard (as in extremely real in simulating driving on a wet road).
In WRC the tracks gradually deform from your tyres and it stays that way all in real-time. When it starts to rain the ground gradually becomes very muddy causing it to stick to the side of the car and it also builds up on your tyres. Barriers are fully deformable and you can fly well off the course, not to mention that wipers can be activated to wipe off mud on your windshield.
Lighting has been greatly improved and the graphics of every track in the game has been improved 20x's over from the current build you guys are seeing on mimiximax's YT channel, PD have also over come those fuzzy shadow problems. The showroom looks very different (but it's only a test) and the textures within every cars cockpit have been vastly improved, hand cross over animations have come back, but this time the animations look very solid and incredibly real.
Animations for gear shifting looks 10x's better and there's no more hand clipping with the steering wheel. There's now a new animation for scrolling down windows which brings a new element of PD's GT5 engine, 'dynamic sound' meaning PD can accurately capture the sound of a car from the inside with the windows scrolled down having sound coming in from the outside at the same time. Cars zooming by with your windows scrolled down sounds very very real and during rainy conditions rain can enter your car if your windows are scrolled down (that just blew me away seriously).
Grass can tear and flick up in the air and muddy grass gets stuck on your tyres and suspension. During night races rain can still be seen with your headlights reflecting light off of the rain drops. Animations for switching you wipers on have also been added.
PS-Move support has been added for pit stops and rough driving animations have been added such as the drivers hands and arms shaking (this feature is greatly shown off in WRC).
There's tons of more info and it's coming soon. The game is 97% complete.