Looks like everyone got distracted by my comment on that hill (which I'll get back to in a minute) and missed the more important point. So I'll repeat.
Every single techdemo and finished game that we've seen from the nextgen consoles - that have been proven to be real and realtime - share some very important common qualities. From PGR3 and Kameo, through Gears of War and MGS4 and Heavenly Sword and Fight Night, to Lair and Project Offset, they are all relying on the combination of implementations and extensions of well-known hardware rendering techniques, different mostly in art direction and efficiency. Many of them are justly considered to be state of the art, coming from the leading studios of the industry - but they're all using texture mappedd polygons, normal mapping and (in CG terms) simple surface shaders; they're all suffering from various geometry and shading aliasing artifacts, and they're all still easily identified as realtime rendered scenes. Especially the image quality (the one developers can do the least about, given the limits of the hardware) is noticeably different from the polished look of most CGI, but this is also the first thing that's cured in a shakycam video.
My point is that we're still just taking the first steps into this next generation of consoles, and developers are still in the stages of adapting to the new technology. While I'm somewhat aware of the exciting new possibilities of the hardware, experimentation is still constrained by budgets and deadlines. It is unrealistic to expect developers to totally revolutionize hardware rendering techniques in such a short amount of time, and it is foolish to expect or even demand CG-like quality from the upcoming games. People should have learned by now, based on the above mentioned games' graphics, what they should get to see; and it should also be at least a bit more obvious when a publisher, developer or hardware manufacturer tries to fool us with prerendered stuff. Unfortunately, it seems that they are still able to do it again and again... and I wonder if it's worth arguing about, or should I just wait and let time decide it.
So, getting back at those hills, I've said that if it is not a photo (or otherwise pre-calculated and baked) texture, than it's not likely to be realtime. As good as normal mapping is, it'd still not be enough to produce that kind of self-shadowing and soft lighting on those hills, you need geometry to do that, and loads of it. But please take your time and read my post again, it was just the first thing I've mentioned because there's a lot in that small video already that suggests it to be CGI...