Now on to the question of graphics, so far I've only read Gamespot and IGN's reviews. Those are the two biggies. Both seemed very positive on the graphics.
IGN:
The replays also create a greater appreciation for the beauty of Halo 3. This is a gorgeous game that has such a quick pace, it's easy to miss out on some of the things it does well. Pause during any explosion and fly the camera by to view a marvelous shot. The particle effects are truly top notch. It never fails to impress. There's the smoke and dust from the back of the Brute Chopper, the blinding red bolt of the Spartan Laser in action, the subtle shine of Master Chief's armor. Considering that Bungie had to have every nook and cranny of the environment detailed and rendered constantly (because you can detach the camera for replays), Halo 3 really is a marvelous technological achievement. It may not be the prettiest game on Xbox 360, but it's also doing far more than any other game. For that, I can forgive the occasional moments when the framerate jitters or there's some minor texture pop in. I get texture pop in just trying to butter a bagel.
Gamespot:
Halo has always had a very strong artistic vision, and the graphics have always been just good enough to convey the necessary imagery without becoming huge technical powerhouses. That's not to say that the game isn't technically impressive, because it maintains a smooth frame rate throughout, and looks very sharp overall with plenty of great lighting and other nice effects. But the visual design overpowers its technical side and really stands out. Given that the game takes place in a wider range of locales than the previous two games, you'll see a lot of different, colorful environments, including deserts, snow, jungle settings, great-looking building interiors, and more. The enemies, many of which are returning from past games, also look great.
So I dont know, the entire premise that the graphics are "average" seems flawed to me.