GT4 has to be the one of the best sim out there, Forza I think is just no comparison with its weirdly colored images (maybe it's my friends TV) and lack of proper steering wheels. Enthusia is also a good game, not sure if it qualifies for a sim, but the cars seem to handle pretty accurately.
My only complaint with Forza are its curbs around the Nurburgring. Are they really that HIGH in real life? Unlike GT4, I find myself driving different lines in Forza just to avoid them as getting on top of one usually means getting the car launched in the air and finding myself on the grass.
Isn't it a bit rough to call GT4 and Forza arcade games? I'd place them somewhere between arcade and sim.. Arcadey sim racers ;P In my mind games like Ridge racer and PGR and the likes are arcade racers.. And both GT4 og Forza are definately more realistic than those.
from my point of view, LFS has amazing physics. the cars look bit like real cars, but then, there's still sign of your valve cover blowing up to bits when I mis shift with my G25 and revs do a not-so-nice visit at the 14k range in a car that has redline at 7k.. engine just loses power. LFS, RBR, GT4.. that's my top three. and when GT5 comes out, I'll add it to that list too. and I've played forza and tested forza 2 demo at shop, and.. well, it's on ridge racer level IMO. ultimate ricing simulator is the word I use to describe it.
^And you'd rate GT4 to be more realistic? :/ And why call it a "ricer simulator" just bceuas eyou can mod your cars? What's wrong with having choice? People have been making some beautiful designs with the decal editor. And i've personally have had tons of fun just trying out all the different cars and modding them.. Much more so than i did playing GT4. I don't know, GT4 just seems a bit dull and generic compared to Forza.. And Live for Speed, of which i've just downloaded the demo. And i'm loving it.. Just wish i had a wheel - and money enough to buy the full version.. ;P But unfortunately, i'm broke.