Yes, the facial animation is simply unprecedented, very very good job there!
It looks like they've done a complete capture for color and normal maps for a lot of facial expressions, maybe even for all the spoken lines. Kinda like they project a video and a normal map of someone talking onto the geometry.
Unfortunately the skin shading is nonexistent (color map, normal map and a simple Phong highlight, seems like not even a specular intensity or specular color map)
And the lighting is simply terrible, looks like 80% constant ambient and 20% for a single directional light. There doesn't seem to be any shadows at all, not even when someone's inside a room or a car or stands under a street light.
Edit: I think it's the hardware that's not enough for the entire tech and a good quality renderer, so maybe we'll see something truly awesome on the next gen consoles from this facial capture system.