A little context would be helpful.
Have you personally played the game? "From what I hear" tends to indicate no.
The physics don't feel right compared to what? Real life? Other games? Your imagination of what it should feel like?
A lot of the rest is subjective and I wouldn't attempt to argue someone's opinion. But, "this isn't a true sequel." Where the hell does that come from? Even looking at it from your decidedly negative point of view, would you say that Forza 2 is less of a sequel than GT2 was to GT1? Seriously? I'm sorry, that crosses the line from a negative opinion to outright trolling.
Wow, did you help develop the game?
I've played the demo, and the physics dont feel realistic under damage, which kinda negates the point of having it in the first place.
One thing about GT2 was that it was a much bigger game than GT1. Forza 2 has a decent number of cars, but a fairly low number of tracks (in the full game).
As for the graphics? Meh. PGR 3 look better, and how old is that game?