I was a bit surprised to hear that he didn't like Oblivion's gfx, but then again I remember how badly the Samsung TV sets we're adjusted in TGS, so I'm really not that surprised in the end. It kind of bothers me that the same retailer demo x360 sets will be distributed everywhere with the same crappy settings.
But still, it has become obvious that x360's launch WAS a bit rushed when it comes to games - the most of the first wave of games are sadly pretty much more 1.5 than 2.0. But, on the other side I'm glad I'm atleast getting SOMETHING right away, not having to wait to fall 2006 for our console and games, and we know there's a loads of great titles coming up just around the corner.
My december and january will be well spent with PGR3, Saints Row and Condemned. In the springtime we'll have plenty of great titles, including GOW, Ghost Recon and new sequel for Splinter Cell series, of which current installation looks amazing even with current hardware.
So there's nothing to panic about, some games will look better and other games look worse. But that's pretty much the way it has been since the first computer games.