Yes, after playing Forza 3 extensively for the past few weeks, the cars are extremely arcadey. They take forever to start and stop, but you can turn corners at full speed with no problem.
As for the game, I really can't figure out the truth vs. doubt. I think I've been wrong probably 75% of the time. I got tired of reloading when I got things badly wrong so now I try and figure out what the correct answer is and then check a walkthrough to see if I'm right or not.
The dynamics of the interviews seem extremely implausible as well -- I'll be going on amicably and all of a sudden I'll call someone out for lying, then the next question will be a truthful one and it'll be back to amicable conversation.
As for not being able to fail a case, it is possible to fail, but the game just then reloads from the point right before you failed the case. So far I've failed cases by:
1) Getting too far behind the suspect and losing him (I chased a guy out of a window and assumed he'd be smart and go down, but no, he followed the movies and ran up)
2) Accidentally turning on my siren when I was trying to covertly tail a suspect (oops!)
3) Backing my car over the dead body when leaving a scene (for contaminating the crime scene).
Overall I'm kind of disappointed by the game, mostly because I really can't figure out the interview parts. The person will look around, fidget, and not make eye contact, but is actually telling the truth, and then there's another case where I should doubt when they look me right in the eye and don't fidget at all.
I've also had issues with when to play the lie card -- there are times when the person said something that didn't corroborate with the evidence I had found, but she was apparently telling the truth because she didn't know the real story, and another case where the evidence didn't directly contradict what the witness said but the "correct" answer was to use it as evidence for a lie anyway.