I agree with the notion that H3 doesn't look jaw-dropping, but others are comparing it to UT 2003/4, which is insanely stupid.
There's a few things people have to consider here...
1) The artstyle is very much the same. Since this is a continuation of Halo 2, you can't just redesign the characters, overhaul the Warthog, change the look of the guns. You can add detail, and apparently they've done that. Perhaps the issue is that a lot of this detail was already in Halo 2. It's another DoA 4-esque situation of diminishing returns as far as detail goes. The more noticable upgrades would probably have to do with effects, rather than polycount. Ie. better smoke effects, HDR implementation, motion blur, etc.
2) These levels are being tweaked. They are being tested for their playability, not for their graphics. The level can be populated with grass and foilage later. At this point, they are testing out the online gameplay.
3) We've only been able to "judge" this game with scans and videos taken off of a composite cable. Doing that to even Gears can make the game look 10 times worse than how it really is.
At the same time, people claiming that it looks better than such and such game, should take a look at point 3, and also have their eyes checked.