District 9 looks great, but its not THAT impressive, as Starship Troopers pretty much paved the way for it. Realistic shell-like creatures were done back in 98, so in 09, its not that huge of a deal. There's something about the way light bounces off the crustacean like texture that lends itself to CG really well IIRC.
I wouldn't say its even in the same stratosphere as Avatar. The thing with Avatar is that despite being full of so much CG, all of it has weight, all of it feels like the elements belong, and its never hiding behind a crutch, its all in the spotlight to see, and all of it works. The best CG work of Avatar is pretty much
the best CG work in the history of cinema, District 9 can't really compare.
I don't really care what matches to OUR reality closer, I care about what works in the reality presented on screen, and Avatar presents such a complete package of things that work, not to mention the best human/CG integration, and CGI emoting ever seen on film, that in the end, its an easy winner over D9, never mind every other CG heavy film in existence. At no point did the seams of the reality that Cameron fabricated ever begin to even remotely tear. It all felt so utterly tangible, especially in 3D.
Even in a scene where the natural lighting is unlike anything you would see on Earth, the photo-realism is still showcased:
The fact that someone mentioned "putting aside Pandora" kinda says it all. You can't seperate it. The whole thing is a massive, massive, massive undertaking, that is probably still years ahead of what any other movie in production or pre-production can achieve (or afford to achieve
).