I've been meaning to return to this subject for a few days now. This has been the wackiest Christmas ever.

Anyway...
GT5's main issue with sound itself is the volume of different things. I've driven some extremely loud cars, and it sounded exactly like NFS Shift. You put full racing exhaust on something and it should be screaming at you, tire noise be damned. I never once heard the tires squeal on a Trans Am with full headers, y-pipe, no cats and no muffler. Because you can't, not over 120 decibels.
I know the sound thing has been pretty much beaten into a crater by now, but I wanted to bring up this. The reason that you can take a roaring monster car around turns in real life without hearing the tires is because you can
feel it. In a video game, you just can't. There are only two real sensory inputs most racers can use to judge how well a car is taking a turn, which are force feedback and tire noise. Realistic or not, there has to be prominent tire noise, because most racers can't carry around tables of performance data in their heads to use in estimating how fast a given car on given tires can take a turn. Rather, they race by what the car is communicating to them, and that tire noise is really important to most of us.
The cars do feel much heavier in Forza, I wouldn't call it sailing tho. Still drives well...
Drives VERY well. Tire physics, and body roll are the best on consoles currently.
I know this is a touchy subject around here, but in this case figures into the discussion rather strongly. Turn 10 has done some very good work on the dynamics of their cars this time, as I haven't seen such realistic body roll and collision physics outside of Live For Speed. The sense of weight is also very good. But I must say that the driving part is just a wee bit strange. I know the long time Forza fans, and converts from games like PGR, NFS and TDU love Forza 4, as well as a few GT and sim fans. But for the rest of us, it's definitely an acquired taste, and taking turns in Forza just isn't like taking turns in just about any other racer. And features like ABS are poorly modeled.
The next gen of racers from GTR3, rFactor 2 and C.A.R.S. look interesting, but I have to wonder how much more immersive they are. It seems that in this thread, immersion and thereness boils down to being surrounded by a noisy car-monster with high quality noises, so it's understandable why Shift 2 and Forza 4 get high marks there. But I want to remind everyone that there's much more to being in a real life race than a noisy car.
There's the whole environment thing. I know that other games have had time of day changes and weather, in a sense at least, but GT5's environments are much more convincing. If GT5 had the rules, race marshals that actually did things, even pace and safety cars, that would add a little something to the race experience. Another is reactive crowds, which would respond to things like race starts and accidents like real people would. I mentioned more realistic pit stops and active pit crews as they work on your car.
Yet another factor which helps are little touches like cinemas. In the GT5 Special Events, there are cinemas which depict in marvelous images and music the advancement of your driver through a grand tour, and the ever more powerful cars you use in your progress.
Everyone seems to focus on the more ferocious car sounds as the key to an involving race experience, but it seems that to most of us, we get more immersion from having a good racing experience. A wheel controller which delivers good feedback, and a car which communicates well through the game. I would insist that to go as far as you can with that involvement, it takes more than good loud car sounds. It's all the other elements involved in a real world racing experience. And delivering that in a game requires a pretty powerful system to bring those thousands of little touches to life. You don't look to other games for all this. Like, what game does SMS look to for inspiration for C.A.R.S.? Or is it real life motorsports?
In Polyphony Digital, we have a president who has real world experience in professional racing. He knows what it's like. Now he has to find some way to wrap as much of that up in a game as he can.