I wouldn't want it to be so real that i could mistake it for real life but I would enjoy having the special effects on things, like really detailed clothing or swaying of someones clothes, reflections on water, blur, hdr, just really detailed and above all pretty.
imo however, the realism in ps3 and 360 don't feel realistic to me. They all seem fake, like that nba game for ps3. The graphics are sweet, i would really enjoy all those details and stuff but the characters just look like clay figures or something that have been misted with water for sweat and stuff. For me, i've always could tell what was real and what was not maybe because i'm part of this digital generation. So far, for me nothing has gotten so real that i mistake it for real life. But anyways, crysis is getting close.