I didn't think it looked too bad, the textures and the background looked soft and pale but it was a low res video. Also it is a PS3 / Xbox game; both consoles are getting a bit limited now when compared to the latest PC's. A game with a wide open area like that in high def textures etc is going to need a ton of video memory. That's something the PS3 does not have.
I remember when the PS2 version of Drakan came out, textures and the world looked bland compared to the older PC version however the polygon count & draw distance was much higher. Guess it's the same kind of thing here.