They just said that they had to improve the AI because it has to deal with 16 cars now.
Honestly though I haven't seen really that many improvements yet, but we'll see - it's hard to tell in a race with that many different kinds of cars. In the meantime, he says that if your bandwidth and latency is sufficient, you can do 16 player online, which is absolutely fantastic (and makes the whole AI thing a moot point for me).
He confirms what I have said about GT:HD already, that the grip is one of the examples that show the differences in physics model, partly a result because they've completely rewritten it. They had a D1 driver test the physics and were happy to see that his movements on the wheel were an exact match to his movements in the real car. Also important to note is that they'll have two modes: standard and professional, to cater for a differentiating crowd (i.e. those who wrote to PD saying that GT4 was too hard for them, and those who wrote that GT4 wasn't hardcore enough, that they wanted more 'real' driving). That's great news also.
180 days per car confirmed (=180xGT2), and so a few less cars for GT5 confirmed also.
And yes, damage is coming later, but it was interesting to hear that they have modelled the cars completely modular, so that they can also (later) implement working with different bodyparts and such. I presume this will also help with car-damage type stuff. But we'll see.
The weather indicator on the mypage is confirmed to definitely not be about the racing, as it's just saying what the weather is like in your part of the world (the location you set in your profile). You can also put stuff in your profile such as your favorite car brand, color and so on. Also, they aim to eventually have seamless integration with Home, but they're clearly not certain yet if (as in seamless), how and when they'll get it done. In the meantime, in online matches there will be a penalty system involving time penalties and speed limiters.
Apparently also this is going to be a BluRay disc release in Japan and Europe this year, but a US release isn't yet confirmed (compare this with GT4 Prologue's release). If you live in the US and want this, you should make some noise.
And no driving tests in Prologue confirmed also.