Ultimately, I think they mismanaged their focus of the engine for Halo 3, making some parts of the game beautiful, but overall underwhelming for most. Its clear with the massive improvements that Reach brought at the sacrifice of Halo 3's HDR really helped the game visually, though Reach is a little too absent of lighting solutions at times. I found Halo 3 to be a visually underwhelming game, but ODST really utilized the engine and looked good despite the engine limitations IMO.
Yeah, I loved ODST because it was a beautiful swan song for the Halo 3 version of the engine. It was like the DLC graphical bump multiplayer maps usually got, but for the first time, also for a campaign. Especially that last level on the highway. That sunset/flooded sky look, the carrier appearing in the clouds and then strafes the city... amazing. Then of course, dmiller had to top himself by having multiple carriers jump into New Alexandria and start glassing it in Reach :lol
But it really was the first time a Covenant capital ship actually INTERACTED with the world you were in. In Halo 1, there was one, but it was scenery (and seemed a bit.. underscaled from the outside). Halo 2 they were all painted into the skybox for most of the game and were barely noticeable in the first level as one flew by. ODST's glassing moment was so suprising because it was the first time one of them actually DID anything while you were playing.
I hope 4 has those moments where something effin' big like that interacts with the world you are in.
edit:
The matte cruiser that always annoyed me in Halo 2 was the one on Delta Halo/Regret:
It's just so obviously painted in that I wish they had omitted it. Took me out of the game for a bit when I saw it.