That vid is pretty cool.
It definitely looks like real time to me.
It seems like this vid and the others that we've seen from GR3 are all heavilly scripted, though. I want to see what it will actually be like playing the game, controller in hand. The way that the crosshairs float across the screen just seems a little odd still. I also want to see how you can interact with obstacles, trees, walls, etc.
I am a big fan of GR2 and the others as well, hopefully we will be seeing more of this one under actual gameplay scenarios soon.