For me, my personal interest in GTA IV has dropped slightly after watching this trailer. It's still a day 1 full-pop purchase without question, but it's looking more and more ordinary every time I see it. The character models do seem a bit out of place with the backgrounds. They kinda have a washed out look to them. When I saw the very first trailer, I kinda had that, "Oh my God this is going to be incredible" feeling. I thought the game was going to dramatically push the boundries forward, from what we've been seeing so far with 360 and PS3 games. After seeing this second trailer, it's more like....back to reality. Don't get it wrong, everything looks good, and I'm sure it's going to be a blast to play, but this game doesn't appear to be lightyears beyond Saint's Row. After watching the first trailer, I was thinking that Saint's Row was the work of amateurs and that GTA IV is going to blow that completely out of the water, but after seeing this, it appears that this is just going to be another very good sandbox game with some next-level visuals. That's not a bad thing, mind you, but GTA IV isn't going to have anywhere near the impact on Next-Gen consoles that the first GTA III had with the PS2.
At least that's my take after watching it like 6 times.