The PC has the APIs and the hardware to handle so much more, but the consoles are holding it back.
At this point, I think you can honestly ask if they are holding it back or keeping it alive. Outside of MMOs, PCs aren't generating the revenue to develop all of the titles it is seeing if the consoles weren't covering the bulk of the development costs.
i doubt the issues of lag that come up when dealing with splitting up an engine
This is a profoundly stupid lie that makes no sense- if anything lag should always be reduced when using multi threading. Whoever told you otherwise, or wherever you read that, has absolutely no clue in hell what they are talking about, it doesn't even make sense in the abstract. It is utterly illogical on every level.
Therefore, the screenshot shows the strongest benefit of PC's over consoles: that they can take the same techniques and do so much more with it.
This covers draw distance and rendering lots of objects at once,
I'm interested to hear what you would consider impressive in Crysis as it relates the consoles.
Character models are solid, texturing obviously kills what the consoles can do overall and some of the shader effects, the water/wet effects in particular(although the waterfalls look like garbage). Where Crysis falls down- particle system and physics are the major stumbling blocks IMO, it is flat out inferior to some console titles on those fronts.
And as I stated, no wonder everyone's talking about it - they finally strayed from the norm.
97 on Metacritic is probably a much larger factor 
I'm not sure this means anything . It uses all the cores? For what? To what percentage? NO offense, but you never seem to say anything concrete about what is being done .
Do you know anything about comp sci, or at the very least, benchmarks involving processors? Core useage goes up and down constantly, Naughty Dog couldn't give you concrete answers on what percentage of all the cores it uses. How are you going to measure that? % load per core perhaps? It is going to fluctuate all the time based on what is on screen. On the PC side things work a bit differently, the game renders as fast as it can, on consoles they normally work with locked framerates. If a particular frame has less of a load for SPE 5, well, SPE5 isn't going to be at 100% for that frame.
It's just not as good at graphics as graphics chips AND THAT's the bottom line with .... graphics.
No, what developers are doing is the bottom line. The hardware just determines how well or if you can run it.
Peak graphics (best to best). Crysis is better than anything consoles have period.
You will find debates on behalf of GT5, I'm not comfortable going that route until I get my hands on the finished game though. Titles like KZ2 are already showing how poor Crysis is in certain areas(particle system, weapons models) and from the looks of it Rage is going to spank Crysis on texturing(multiplatform, but just bringing up another example). Overall I agree, but that leaves a huge gaping chasm.
Where is the PC racer that looks better the GT5, or hell even Forza3?
Where is the PC action game that looks better then UC2?
Where is the PC adventure game that looks better then Heavy Rain?
Could keep going, but you get the point. If you play a variety of games, there are many genres where the consoles have a clear edge even in graphics. This isn't because the PC can't do them, it's because PC developers aren't doing them.
Take resident evil 5. IT's a very good looking game on consoles.
RE5 isn't bad, but it certainly is showing its' age, it is not in the discussion for best looking console games, not even close.
You speak often that the PC is not fully utlized and this is true... except to the extent crysis did bring high end pc's to their knees but let' snot digress.
Back in 2007 there was a game that brought high end PCs to their knees, that is true.
Again, read the op's title saying consoles can run games that more powerful PC's can't.... simply WRONG.
How about this, why don't you go out and get the highest end i7 processor, phase change cooling for the CPU and dual GPUs, make them 5870s. Now, take this rig and tell me how Gran Turismo 5 runs. Remember what you just stated, it is wrong to state the PC can't run the game, so let's see some numbers.
Wouldn't a PS3 exclusive look better on the PS3 because it's a ps3 exclusive?
KZ2>GoW2
GT5>>Forza3
UC2>Anything on the 360
That is what I am talking about. The top tier PS3 exclusives look better then anything on the 360, most of the time it is fairly clear too. Just run the games back to back on your 360 and PS3, it is painfully obvious.
The point you are missing has been stressed by many people in this thread, i.e., the graphics processor matters the most.
If you check my post history in this forum you will probably be able to figure out I might have learned a thing or two about GPUs over the years, maybe even a bit more then the average poster.
They still look/feel claustrophobic.
I posted a vid above that shows the engine opening things up a bit. Yes it is scaling detail in the background, not as badly as Crysis does though(hate, hate, hate the geometric LOD pop on rocks....).
Halo 3 runs at 1138x640 with no AA.
The screenshot you linked clearly shows AA is on.
Hey Plonk, turn on a framerate counter with those mods going
Absolutely stunning, but not quite what I would consider playable yet
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