Yeah, the jaggies are pretty harsh. You won't notice them so much when everything is in motion, I'm sure. GT3 has jaggies too, but when the screen is moving uber fast you don't see them either.
Take a Lotus Esprit on a drive inm GT3, then look at the front of it. Those anti-aliasing problems don't seem so alien now do they? And BTW the Xbox version looks identical.