Its linear in the same way Half Life 2 is linear. There's only one correct way through the game but the quality of the level design never leaves you feeling that you're walking along a cleverly disguised corridor.
I heard it referred to as 'linear' so many times that I thought it was going to be a corridor shooter. I turned the hud off and have spent most of the game so far in large forested areas wandering around. It is linear in that there is only one way to go, but it isn't a Call of Duty situation where you are running down a hallway with dudes popping out right in front of you.
I'm upto chapter 3 now and its been fantastic so far. If the texture resolution was increased and the game supported dynamic tesselation of the environment to smooth out the harsh edges and disguise the LOD pops, I think I'd be confident enough in saying it was the best looking game around at the moment. As it stands, its certainly in that upper echelon with the SSAO, dynamic shadows and volumetric lighting being as good as anything else out there and the integration of high quality FXAA as well as correctly implemented MSAA in a deferred rendered game is much appreciated. It does antialiasing better than Crysis 2, Battlefield 3 and The Witcher 2 which all stand as the best looking games of 2011, so its not something to be brushed aside, Remedy created a proper PC port here.
I'm so pleased I waited for the PC release, the game simply was not built around the restraints of the 360 platform. This is not only the definitive version but the true vision of the game.