Will the next generation of consoles herald a truce in the graphics arms race?

Just how far can game companies push graphic capabilities of game consoles? We saw huge leaps from NES to SNES, SNES to N64, N64 to Cube. As we get deeper into the succession of game consoles, the jump in graphics becomes less and less noticeable. Sure, there’s a nice difference between the visuals on a Wii or a 360/PS3, but where do we go from here? Just how much more ‘real’ can graphics get?