You guys probably saw the Gran Turismo 5 vs. Forza 3 - AI comparison video that went around the internet for a while.
As someone that played both games (and Forza 3 for a loooong time), while the GT5 AI is far from perfect, that video always seemed very fishy to me, so I worked on it, and found some interesting facts. basically the video had been staged carefully in order to make GT5 lose the comparison automatically. This video is the result of that research.
Mind you, this video's aim is NOT to say that the GT5 AI is perfect, or better (or worse) than that of Forza 3. With the limited memory resources of a console of this generation and 12 cars on track, I doubt we'll ever have a perfect AI.
It simply shows that contrary to what "the internet" says, in most cases the GT5 AI will detect obstacles and will try to avoid them. Most of the times it'll manage, sometimes it'll fail (otherwise it wouldn't even be able to overtake). If you cherry-pick locations and situations, you'll be able to make the AI of every car simulator fail miserably, and that's exactly what the author of the original video did.
It's sad that people feel the need to rig a video to make a game look worse than it is.