I can't think of a game I've played recently that had terrible visuals on either side of the spectrum, but was still awesome in spite of itself. Many great games have so-so technical graphics but still stand out from an artistic perspective. No More Heroes, for example.
Dragon Age is certainly the most recent game I played that did not have outstanding visuals, but still managed to greatly impress. My good friend and colleague Justin Calvert has said to me that he doesn't even a mind a game that looks mediocre in some ways as long as it has a consistent look to it. Dragon Age on consoles is such a game. My first 30 minutes with that game were not pleasant (It's worth pointing out that we received the 360 version first, so it is the first version of the game I played.) I actually called over several people to my desk to check out just how mediocre the opening cinematic (something Bioware has, in the past, excelled at) and first portion of the game looked. But Dragon Age's graphics are consistent, and so that poor first impression (visually) fades.
OK, scratch that. Comet Crash on PSN was our downloadable game of the year, and that game has terrible visuals, both artistically and technically. I also know there are some fans of that F1 game on the Wii that was released not too long ago, and it looks like crappola.
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