I think that it could only be some fairly complex animations and preset geometry. For example, they might make a window ledge on a wall, and animate the character on that directly, so it's perfect. Then the window ledges are based on that window ledge, so the character can be animated perfectly. I think they must have seperate animations for all the ledge hangs.
I don't think it could be dynamic, like checking hand locations etc etc - it would be an absolute nightmare to debug, and we'd see bugs - instead we see perfect climbing animations, but only where the level designers allow.
For us hobbyists, that's kinda a stretch of our abilities - really you'd need to write your own animation system, so that you could have test geometry and have real control over the animation. That's what I'd do anyway, so rather than the animation being based on a scene, it would be based on the characters position in relation to set geometry - that way your free running character could interpolate into the required animations for climbing etc. Would take a lot of work, but would be a lot of fun to work on as well. To be honest, I don't like the process of animating characters for games, trying to work out a walk cycle with no physics, no moving floor, no gravity, and just linear animations.
We don't really see improvements that often.
Imagine for a second, if characters could react with their environments properly - in GTA4, characters barge through doors, how cool would it be to have them open doors properly, or hang onto lamp posts when drunk, or trip over a kerb, or pick up and use a phone properly. Would be the next level of interaction. GTA4 does a great job already with it's dynamic animations, but we just can't do without traditional animation for the more complex actions.
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