I have now played the demo. There are definitely some wow moments.
Things I noticed and enjoyed:
+You can pause the movies - helpful when somebody rang me during it (damn them!)
+The best layering of textures I've seen. The rocks are wet when they need to bet wet, and on some walls, you have damp moss,very wet moss etc. Looks godly.
+Shadows and lighting...just amazing. No jaggy shadows! incredible.
+Love all his animations when you're not doing anything...getting out his gun when he hears a sound, patting himself down, crouching down, putting his arms on his hips (lol) And in general...by being responsive and having smooth animation...certainly the best animation to date.
+Shooting a toucan was fun
+Walking through deep water, felt like walking through deep water
+Wet drake...and more importantly, partially wet drake
+Crossing the log wasn't as hard as some people said - I didn't fall over once, sixaxis was a nice touch
+Oh and getting him right to the edge and watching him trying to balance on one leg is very entertaining lol.
+The music was godly...and reacting to what I was doing.
+Destructable cover was very fun - especially the stone ones.
+Nate's hair shader...and generally nate in the whole is amazing looking.
+His facial expressions during punching and combat, and his heavy breathing...all really adds the this.
+What I think is really important...is both here and at neogaf we were complaining about him floating...or partial floating on non-horizantle edges. This is completely gone - and spectacularly gone! People were commenting that it was a problem we were always going to have, but Naughty Dog have solved it. On leaning edges his feet would angle correctly, if there was a hole, one of his feet would go in the hole. He would rest his feet on the bodeis. Really really well done. Does even AC do it this well? I've seen him on roof tops with floating feet...Drake's bend down the right angle!
+Walking on bodies! Wow...this was cool...I'd just stand on a body and jump up and down on them watching them react...and then I'd push them off the edges. Very funny! lol
+Control wise...very good, very responsive, he did what I wanted to do, and jumping from cover to cover was very easy. I was worried I wasn't going to like the shooting...but it is very good fun, and running around trying to punch them out and pick up their grenades was really cool.
-I need to work out the timing on melee...but I did a neck snap and a flying kick kill as well.
-Minor tearing when I was pissing about.
-I don't want hints! So I turned it off