Look at Alan Wake on Xbox, crazy low res frame buffer, but higher resolution post processing.
We will start seeing more and more dynamic resolution too
And I think Alan Wake is one of the better looking Xbox 360 games. People attempted to rip it to shreds in screenshots, but it did nothing to take away from a game that looked pretty damn great in action.
Basically, if that trailer was really in-engine stuff, while it may not say much about what it will look like during gameplay, it most likely means, at best, that's the level of detail we can expect at 1080p 30fps in replays, which is damn impressive if true. Still, if the game is 1080p 60fps and looks incredible during gameplay, then that's a very good sign coming from a launch title on a console whose power a lot of people seem to be doubting.
Can't wait to see real gameplay during E3, and see what else is being worked on. I hope Quantum Break has a truly incredible showing. I have a lot of high hopes for that game, and Rare better show something awesome (that isn't Killer Instinct).