From playing both Forza 4 and GT5 Spec 2 over the past few days:
* Forza is completely solid as far as visuals go, but GT5 still holds the crown for lighting, car detail, and fewer jaggies, but this comes at the expense of quite a bit of tearing.
* Forza 4's simulation driving settings are an improvement over Forza 3, but GT5 still has the best driving feel (imho of course), audio and rumble feedback (talking strictly about using a controller here), and a much greater sense of speed.
* Forza 4's AI is at times idiotic and at other times homicidal. I've had few races so far where I haven't been sideswiped, pushed right off the track, or watched as the other cars on the grid collided with each other like brain-dead pool balls. Its workable, but its not good.
All things considered though, I'll probably end up spending the lion share of my time with Forza 4, because of the audio (omfg so good), career mode, community features (including rivals mode), and some decent Top Gear integration. I know GT5 has the test track but there is no way in hell I'm grinding through those bullshit challenges to unlock it. I don't have the time or patience for that stuff.
GT5 has the best driving on the consoles, even now, but yeah, Forza 4 is the better game.