It's already clear, but from this linkI was hoping One could clarify that point a little more since it was taken from a Japanese interiew.
It seems to me this sort of dynamic system would be useful for a Demo at GDC to keep the framerate smooth, but not something they would include in the final game.
http://www.watch.impress.co.jp/game/docs/20070326/fm2.htm
+ Rendered in 720p. The AA level changes between off/2xAA/4xAA to maintain 60fps
+ Motion blur is generated but not apparent since the designer thinks it's not necessary when it's 60fps
+ Average poly count per scene is not disclosed. A car model is on par with PGR3 (80000-10000) or lower including interior models
+ Shader code is HLSL, it has specular maps, ambient occlusion by spherical harmonics, variant shadow map.
+ The first CPU core does gameplay (physics, AI, network, UI), the second core assists graphics rendering, the third one does audio. Secondary threads of each core do decompression.
Also damage, physics and AI are discussed, no car flipping/burning due to license is mentioned there. Damage is done by having 2 models for each car, an original one and a completely broken one. So the broken state is precomputed. How to transform into the broken state is however realtime, so it's like a morphing filter.