Why are people saying that early 360 games didn't look next-gen? At the time they looked amazing.
About Kameo, IGN said "There is an extremely high level of detail in the environments making the experience almost overwhelming in some areas. This is assuming that the game is being played on an HD screen with a 5.1 sound setup. The game still shines on a non-HD set but not nearly as bright because super hi-res texture and excellent particle effects are often lost in the blurriness." and "Other areas, like the massive battles on the Badlands, stand out because they are obviously only currently possible on 360. So if you take someone on a tour of the Enchanted Kingdom you'll likely hear praise for such eye-catching beauty" - they only complained that some levels were obviously touched up GameCube levelsas the game had spent years in development as a GameCube game.
With Perfect Dark Zero, Gamespot said "It's a gorgeous-looking game, especially if you play it on a high-definition display, and the beauty's more than skin deep. Most every weapon in the large arsenal of available pistols, submachine guns, assault rifles, and heavy weapons looks extremely authentic, right on down to their steely sheen and white-hot muzzle flashes. You've never seen a better-looking assortment of guns, and the near-future setting gave the designers license to include lots of familiar hardware, with some surprising special abilities. What's more, some excellent character animation helps make the guns feel as powerful as they look. Enemies recoil realistically depending on where they're hit, no matter if you hit them in the hand, the foot, square in the chest, in the back, or wherever else. And the vast levels are as varied as they are beautiful to behold, setting you loose in jungles, city streets, high-tech industrial compounds, and more. Bullet holes shred the scenery, armor pieces fly every which way under a hail of gunfire, blinding explosions rock the screen, and your enemies' bodies litter the corridors once you're through. Gorgeous lighting and an impressive motion-blur effect that kicks in whenever you make a sharp turn further enhance the quality of Perfect Dark Zero's visuals, resulting in a game that at times could easily be mistaken for a big-budget action movie."
With Project Gotham... you have a point. Reviews complained that while the cars were super detailed in ways not possible before, and while some details were amazing, the lighting was in general bland, some textures look flat, and the buildings looked like they were pulled from a previous generation.
Anyways, my point was, at the time for the most part people were amazed by XBox 360 graphics over its first year. We may not look highly on these graphics now, but back then we were awed.