Is Next-Gen Here?

Now that I have been playing the Xbox 360 for almost a year I have to pause and ask myself....."Is this truly the next generation of gaming".  So far all I have seen are prettier graphics and incrementally faster load times.  The game mechanics are the same, the music is the same, the gameplay is the same, the AI seems only minimally better.

I thought next-gen was supposed to be this immersive experience with NPC's that actually cared if they lived or died.  I thought the graphics were supposed to be CGI movie quality.  Maybe I am just being impatient but this seems just like the "current-gen" with a glossier coat of paint.