RsC2 is far from photorealism. Seriously, the game is detailed and all but it doesn't look more photorealistic than gt4. It's no where convincing like gt4. Gt4 is photorealistic, photorealistic is an art technique that resembles realistic with attention to realistic detail. Gt4 has a great case of global illumination, and lighting, making it look very convincing. And that vid moved as fast as any gt4 vid that was encoded into a vid, it was moving at 30fps and that's usual for any vid that has been encoded.
Lighting: Gt4's lighting is the best in any racer this gen. Lighting can play a huge role in what looks realsitic and what doesn't and gt4 gets the lighting right and dont forget the use of global illumination, making things appear even more convincing.
You are getting things mixed up.
The only reason why GT4 looks realistic is because of the great texturework of the artists. The colors are photorealistic, and there is a reason for that...a lot of them are photos!
Lighting? There is very basic lighting in GT3/4. PGR2, RSC2...heck Midtown Madness 3 boasts far more lighting techniques and uses.
In GT4, basically everything is lit the same, until you are in the shade. Besides being lit by lights in night time tracks, that's it. Shadows are represented by textures. The lighting on the car? Again, textures. Where in PGR2, the lighting is completely done in real time and not faked, GT3/4 uses baked textures to represent the lighting.
Take a look at the first video you posted. Note the yellow car (don't know which kind of car it is, I only remember it's hood. There is a depression on the hood. In a game like PGR2, it would be fully modelled and lit in real time.
In the GT 4 video, it's a texture. The texture is drawn to show depressions and as you can see it is lit wrong on each side. This is because the texture is mirrored for the car (ie. the car's texture is only for half a car. The rest of the car uses the same texture but mirrored the other way. Perhaps this is done to save memory, or perhaps the texture artists wanted to save time?).
So other than limited vertex shading, you don't see much as far as lighting goes. It uses textures for the most part to fool the user into thinking things are lit. Vanishing Point on the Dreamcast did the same, and the cars were superlow poly, but most people didn't notice because of the fancy texture work.
-edit-
Actually the car I'm referring to is the same car used in the Prologue demo of the driver animations posted in this thread.