Still no damage and accident-prone online play hold this back from being a masterpiece.
The driving feels solid enough without being quite as visceral as one might anticipate. The car certainly feels connected to the road, and is certainly a far more realistic experience than arcade-style games like Need for Speed, but somehow lacks the finesse found in more hardcore simulations like SimBin's GTR2 or RACE.
So far so good, but the game suffers from some woeful design decisions that will almost certainly carry forward into the full Gran Turismo 5 and which bode particularly poorly as a show of things to come. There is still absolutely no damage whatsoever on the cars. Some would say this is fair enough and that Gran Turismo is a driving simulator, not a crashing simulator. Most racing game designers realised a long time ago that having invincible cars removed much of the risk from the game. Crashing becomes a temporary setback rather than a race-ending experience, so it becomes trivial. Polyphony still refuse to add damage to the game, and, combined with some seriously inadequate track design, this means that quite often, it is quicker to forego braking and simply crash the car around a corner, using the barriers as brakes, rather than drive a proper racing line. Combine this with some seriously unyielding AI drivers (you might as well collide with a nuclear bunker) and you're left with a jarringly unrealistic driving experience. Compare this with SimBim's RACE '07. RACE's WTCC cars are fairly robust and will stand up to a collision or two, but try to crash your way around a corner and you'll find yourself at the helm of a crumpled piece of metal shaped like a car.
The other serious criticism does not reveal itself until reaching online mode. Since there is no damage and no punishment for extremely wild driving styles, the best tactic to win a race is quite often to crash into the other cars to make sure they can't overtake you. It even turns into an artform after a while, due to there being a particular way in which you can hit another driver online and come off much better. Compare this to RACE '07 (and indeed real life, the very thing a simluator is trying to reproduce) where all but the slightest of contact results in both cars spinning out of control, and Prologue's crashing is not a constant threat to be avoided at all times, but a tool that can be used to get around corners quicker and to prevent people from overtaking.
To their credit, Polyphony have added a system whereby cars making unpredictable movements in online mode are made semi-transparent for a few seconds, so they cannot collide with other drivers. Unfortunately this reeks of afterthought and quite often, a car spinning out ahead of you will turn solid again just soon enough to create an unavoidable collision. The definition of "unpredictable movements" is so dubious that it's possible to trick the game and perform some extremely dirty driving without penalty.
Online mode lacks any kind of selection or filtering, so once you choose the track and class of car you want to race, your opponents are selected randomly. This means it's always a game of chance. Will your next opponents be the respectful racing drivers who are only interested in having a clean, fun race, or will they be the testosterone-fuelled teenies whose aim is to crash their way to victory? There's no way to know for sure, but in all likelyhood, you'll be facing the teenies time and time again.