It looks good in gameplay terms (what we expect out of a worth franchise installment), but that graphics style obviously does not work.
It looks very "iD Tech 4+" ish, you know... unlike Heavenly Sword which I really adored, or MGS4/KZ2. Specular needs to go down a lot, bloom needs to be moderated, and for goodness sakes please try to get textures up to task.
I'm sorry, but when it comes to graphics, the big picture outweighs the technical intricacies by a far lot. The muscle system is nice, but I'd have to question its real contribution to animation if it taxes the PS3 a lot.
Still, they have 1 more year and KZ2 went from "ugh" to "Hey, this is kinda nice!" in 1.5 years, so you never know.