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You know what just occurred to me? PD might have screwed up with some of the Standards and only included lower LOD models for certain cars, or bugged up the loading so they didn't load the higher detail ones. You know, the crappier ones that the game loads when the car gets farther away to save on resources? That would explain why some of the cars looked worse than they did in GT4, and that would explain why this (relatively) small update cleaned them up.
This is my thinking, too. It definitely looks that way, and would explain the easy fix as well as the similarity to the GT4 shot.
In Photo Travel locations in GT4 wheels were in full 3D detail.
In the Photo Mode, very simplified.
EDIT:
I've been able to find this:
(http://ac520.mygallery.biz/albums/gt4/Suzuki_ALTO_WORKS_SUZUKI_SPORT_LIMITED_p02.sized.jpg)
Comparison before/after:
(http://i.imgur.com/i3lOs.jpg)
By the way, GT5 really needs a straight-to-usb upload feature like GT4...
What patch 1.06 seems to have done is improve the reflections and specular effects on all cars. I did a demo of my Alfa Romeo 8C to quickly see if the sound (overall) had been improved as reported, but it was the new sheen that caught my attention.
Those Caterhams also exhibit he new shading. Very nice.
EDIT: I notice the wheels are still the wrong colour on the Alto.