As I see it (and I'm sure my post will just go up in the internet fog):
Every chapter in the GT series was a step forward in PD's grasp towards the ultimate driving simulation, every time a GT was released it was the new marker for driving/graphical realism. Now Forza is indeed a new kid on the block, that doesn't mean it doesn't stand a chance, but I'd say the chances are slim. This is no fanboyism, as frankly, I don't own either console, I play games around at friends houses, and funny enough, that way I got slung tot he GT series (I emulate GT2).
Forza, even though promising, has much to make up for, if they're really interested in keeping the pace with GT they'll have to do quite some effort. GT has always advertised itself as a racing simulator, and that's where I think comparing Forza and GT might be a bit like comparing apples and oranges. Forza seems more like an NFSU. The developers have a lower budget than PD, and need to make sure they get enough customers, they are not sure of a real fanclub. Fanboys of Forza can't do but speculate and hope their game is better, but in fact, they know as much about Forza as the pope does about dealing drugs.
Forza aims at a middle-class, I don't mean this financially, I mean a middle-class that isn't into die-hard hardcore racing, but rather into the visuals of the car than the engine, rather into the looks of the racing, and the feeling of speed than into a correct physics model.
Gran Turismo is however still lacking in some departments, departments such as interior view, skid marks, you know, the things you listed (yes even reverse lights ... wth?). On the other hand, GT more than makes up for this by the ammount of cars they offer a player to drive. Last time I checked Forza was going to model 60+ cars, that's quite a low number considering there are over a 120 cars in GT3 (I don't know exact number), and GT4 is supposed to have a car # in the ranges of GT2 (500ish). Every car is modeled accurately in the graphical AND the physical side of things, creating an interior view (with a real feel to it) would be disk space gobbling. Interior views as the ones found in 99.9% of the race games substract from the overal experience anyway, they just don't look real.
About the licenses, and the damaging: well in the past, IIRC, PD could only get licenses to the Japanese car manufacturers' cars, after GT1 they got access to the mainstay of car manufacturers. At the moment, it's probably that they are licensed to recreate the cars of most European car manufacturers. The only real question marks still there are the Italian supercars. Wether they're in or out is all a matter of speculation, but it wouldn't be so strange if they were in. Think of it, in the past, lots of car manufacturers feared their cars woudl be modeled as absolute crap, so Ferrari chose the easy and certain way, and went with NFS where all cars are more or less the same, and wehre they didn't need to fear getting bad value for money, or any of that. (Ferrari etc might still fear their cars would get doubled by a Skyline with 1000hp in a 5 lap race though). So now PD established itself, Ferrari might cut them some slack. (this is all speculation). On the damage model side of things, I don't like driving around in a wreck. I don't care much for damage models because I don't play a race sim to go trash a car, I've got other games to do that. Crashing is a part of racing, but it's not so much the visuals of crashing, it's rather the physics of crashing, which determine a great racing game. Also, IIRC, some car manufacturers only allowed PD to model their cars because in GT cars can't crash, they didn't like to see their cars getting crashed into the wall and dieing there, virtually...
Ah well, thats just what I think...
No I'm not a fanboy, but I already said that...
<Z>
. Real race cars can have different engines look at the latest R34 GT-R's in the GT500, they have V6's not the standard inline 6's that should be in the car. Plenty of people who are well into tuning cars for performance swap engines it's usually a complicated and expensive procedure but it can completey transform regulay shopping trolleys into 1/4 monsters or coupled with decent suspension and brakes it can turn the mundane into a powrful sportscat killer on the circuit.
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