Graphics were ok, the art design played a major role in making the dated tech look as sharp as it did.
Excellent choice of colours and phototextures everywhere made the best looking urban locales I've seen.
The physics part was too overhyped imo. They didn't feel 'weighty' enough, everything could be flung about like a ragdoll.
The only truly revolutionary parts were the facial expressions, those were too good.
Someone made maps using hl2 game data used under the ut2k4 engine and it looked strikingly similar. Models, textures, everything.