Quote: "its alredy posable to make photorealistic renders, how can you do better than that?"
Renders are different than real-time interactive models. I think I understand what he meant. He's meaning video games for the masses and slightly above avg home computer in the future will have more realistic models than, current movies even.
While they can have photo realistic renders in film, it's not done for every effect. You can still see things that don't look, move, or behave quite right. I also see a difference between Photo realistic, and Computer Realistc. Most of what is computer generated in films are actually too perfect or too sharp, making them look unreal. Along with physics, and human movement patterns, i think will see alot more work going into modeling renders and textures, to minimize the too-perfect to be real. I know a lot of work has already been done, and I have seen effects based of of fractal formulas that can be used on geometry and textures to un-perfect everything.
Am I making sense? It seems in one direction (visuals) we went passed duplicating reality, and in another direction (Physics, natural movement, cloth/particle movement, Animation) we are currently well behind duplicating reality, (although making advances). What's interesting the is until we close the gap, things will look odd. You have the "super perfect graphics", with odd behavior to the environment.
Our brains are so hardwired to detect motion, especially of the human form, that anything even the slightest anomally is easily detected. We may not be able to describe exactly what is wrong, but we'll have a sense that something just isn't right.