Ok, after spending some good time with forza 4. I have to say forza 4 gets the edge graphically being that it just looks way better while actually playing than GT5. There are times where GT5 looks great while playing, then there are sometimes when GT5 just looks like straight SHITE while playing, and im like wtf....then i watch the replay and am like....oh, that doesnt look bad, it looks good, but when I play on that track its ugly as hell.
I am also having more fun with forza4 but that might be due to the fact that it just came out and I had GT5 for awhile.
With that said, I still love GT5 for other reasons, like the rally racing, night racing, weather changing, weather effects...etc.....weather changing in itself is beyond awesome.
Basically, If I had to choose, I'd choose both, but for different reasons.