"Imagine if PD didn't dumb it down then - full-quality 3D models and the like. How big would the demo be then?"
You actually believe that? Oh dear. You're making excuses.
Ok, I'll help you. A single track and car, even at full uber GT mega super quality does not take up that much room. Nor does the game engine etc. What you are seeing is pretty much how the game will look. No, it's not mind blowing, but it's a ps3, not a £2k pc. What you're suffering is denial, you have been so looking forwards to this, so hyped up about it that the actual thing could only be a slight dissapointment. Remember, it has to run in 1080p at 60 fps, a reduction in detail and effects is pretty much to be expected.
The demo is good, I enjoyed it, but considering it took them 5 years to get to this point, it's not exactly incredible. Honestly, I'd say Forza 3 is the prettier of the two (though running in 720p allows loads more details and effects, so there you go).
p.s I got about 1.40 ish in the tuned car, can't seem to get any faster
. I liked the demo, felt better then previous GT games and the tuned 350 slides real good.