On damage:
As far as I am concerned, it's pretty... Mediocre as long as I can downshift and engine brake like a mad man, revving the nuts and bolts of my engine. If I am at the point where my bottom end should simply give in, conrods should snap or a bloody piston should be flying through my bonnet and
absolutely nothing happens, that's just not cutting it for me.
Argue about looks and such all you want - if bad driving like this isn't punished by the damage system, it's lacking a very important, even crucial point.
On sound:
The sound changing by upgrading the car would be nice... However, I'd rather have a car that sounds good and stays that way than a car that sounds like crap and sounds like different crap after upgrading.
And, in my opinion, that's how most cars in GT5 are.
On paint chips:
I feel like PD implemented this to artificially lengthen the single player 'career'. Paying 30 grand for a BMW's Sepang bronze (or hoping to be given exactly that colour) because I want to have bronze wheels on my car seems plain stupid to me. 'Real colours with real name' is all nice and good, just put them on a second palette to freely chose from, or something. Personally, though, I couldn't care less about how the colour is calles or what car it came from, as that doesn't influence how it looks on my car, at all.
If I liked Pokemon, that's what I'd be playing, by the way.
I think the differences between the games really comes from Kaz being an actual race car driver and the Turn10 group not having that experience.
I agree that Kazunori is the cause of a lot of the quirks of GT5. However, I don't really see the touch of a passionate 'race car driver' in GT5.
You'd assume that tuning the car would have a higher priority (point in case: Tyre pressure, I don't know how a race driver could not acknowledge its importance). Same with engine/mechanical damage. Paint chips, museum cards, horns - that doesn't sound like something a dedicated race driver would be concerned with, either.