I must say - considering I only played Halo 3 before I left for England (and hence left my 360 in Canada), watching the HD gameplay videos of Reach on Gamersyde.com; Reach's graphics are a gigantic improvement over Halo 3 - the step-up in texture quality, particle effects, poly-counts, anti-aliasin, pixel-shaders, lighting, and general detail level is making me so very, very, very jealous of you all right now.
What kind of 'disguises' the graphical upgrade is (like others have already said) the art direction. They've managed to add a lot of detail and grit to the game without making it unrecognizable as Halo (which has always had a very cartoony art-style).
Seriously though, watching the HD gameplay videos has impressed me more than when I first saw HD gameplay of OG Gears of War... /salivate