Yes, the "washed out" on PS3 and "great distance" and building "detail" I am guessing is simply due to larger more detailed textures, since we have what? 512MB video cards and 2-4 GB RAM? Compare that to the memory available on consoles, so they will definitely struggle to load and display detailed textures compared to the latest desktops
edit: The Assassin's Creed screenshots (and also of Crysis) posted by stormblast in the PC screenshot section were amazing, THAT is what you call next-gen gaming
I think the unreal 3 engine is a bit dated to be called "next gen" gaming, but I am waiting to try out Bioshock after I get a new desktop myself.