While impressive, bear in mind that it's only a tech demo. Creating a game with assets of this quality would cost way too much.
In the interview just posted, they actually confirm that some of the assets being used in this are straight up from Visual Works. They had Visual Works, the CG team, create a proof version of this trailer, and then tried to match it as closely as they could with the real-time engine.
Kagari and I saw both running side-by-side and it was pretty bloody impressive and close, even though the Visual Works one was a rougher, unfinished version.
They pulled some assets from the CGI version directly, and they view this as an ideal pipeline for future games. It'll be easier on a Final Fantasy if they can pull assets from the CG scenes and use them in gameplay. Think FF13, for instance - the assets for that 'Hanged Edge' area in the game's opening were created twice - once in CG by Visual Works and once at a gameplay level. Being able to share assets across the two should be a time saver whilst presumably making for more smooth transitions from CG to gameplay.
The issue, they admit, is compression. They say one Blu-ray probably won't be enough, even with compression - and in the case of this video, a lot of the ex-CG assets weren't compressed at all.
http://www.rpgsite.net/articles/393-square-enix-luminous-studio-interview