This game looks like shit. This isn't flamebait; it's an honest opinion. PS3 should be able to do way more than this. It looks like a mess right now. The only thing I see that is nice are the mountains in the background (real-time tesselation?) and the water, both of which are very pretty.
The PS3 can do way more than this.
Factor5 is feeling the same sort of reaction certain games (GRAW, FM2, Madden, etc) have received after showing stunning art/technicals and then produce realtime footage that falls flat.
Based on the 2005 footage that was said to be realtime (both the shot from the PDF and later shown on screen of a highly detailed dragon; likewise the footage of hundreds of dragons on screen with excellent shadowing and detail) this is a big drop off. The art is basically the same, so the fault cannot be found with art.
There is still time for this title to improve and Factor5 has a good history of technical excellence (not necessarily gaming excellence, although the GCN Starwars game is ok enough imo) so we will see. With all the bullshots you really just need to see a game being played by a real person on a real console to see what will be realized in the finished product, but Lair definately has a lot of work to do.