There seems to be two camps on how they are targetting performance:
1st camp aims high and hopes that they didn't overshoot the target with what their engine can do on the final hardware. This is definitely riskier, but the payoff will be greater (EPic with GoW).
For Epic, the engine is not a moving target, since for all intents and purposes is finished. And they are taking a little bit of a gamble that the engoine will run at the speed they are expecting on the Xenos with the assets they ahve created on the UE3 engine. They need to target the geometry and other assets in the dark, based on guestimates. If they are off, then it will mean they will have to live with slower framerate or take out number of characters since it will be nigh impossible to remodel everything with lower polycount.
2nd camp aims low (most of the X360 devs fit here) with the Alpha kit work, and with the arrival of the Beta kit, they will add FXs and assetts as the engine allows. This is obviously far safer method, but is generating the most of the initial backlash against the X360.
The fact is, Duane, we are just seeing the beginnings of adding of FXs and assetts in X360 games in the second camp. So your ass will have to remain a bit more patient.
Anywho, I don't expect any of the first gen X360 games to be anywhere near representative of what the hardware is really capable of. Not even PGR3 and GoW.