They are a bit low-res (similar to MGS3). However, textures are a weakness of PS2...so it is expected, but on GC, they shouldn't be there. Of course, I don't think it looks too bad when everything else on the screen looks so amazing. From the very first shots, I could tell that those ground textures were kinda low-res. The rest of the texutres appear to be very good, though...so I can't really complain.
I don't think this is the best looking game ever made, though. It still has flaws present and it doesn't run at 60 fps. It is absolutely one of the very best looking games ever made, though, and has restored my faith in the RE series just from videos!
The actual game mechanics look very solid this time and it seems like it should be a very cool experience. I'm not so sure it will be a scary game, though, but RE games never were. The thing that really entices me is the wide open environments. While there are load points connecting various areas, each zone allows you to enter buildings and wander around freely without worrying about loading. No more "wait for the door to open" animation crap here.