More of a side step than a step forward for the series.
The graphics are pretty much exactly the same as they were in Vice City. It still has all the problems Vice City had, bad textures, shifty frame rate, bad load times, glitches galore, no fingers and bad character design. I really don't notice any visual upgrade at all.
The music is pretty good, although I don't consider it to be better than the music in Vice City or the talk shows from either Vice City or GTA III. I did however have a cool moment when I was listening to the country station: I was driving along in a taxi listening to some country signer sing on about how his ex is in Texas, not paying attention to the road at all mind you, and then bam! I flew off the top of the mountain pass over Los Angeles, probably the highest jump I've ever seen, and land right side up on top of a building, and my car survives. Just a fun moment related to the music I thought I'd share.
The game play is essentially the same with some nice tweaks. For example, you can swim now, a very welcome change. There's a new girlfriend feature, but its pretty boring and very unneeded, plus the hot coffee feature just feeds people like Jack Thompson. The only person I can picture truly enjoying that are horny little kids or pathetic super nerds. Seriously guys, grow up. The territory focused gang wars could've been a nice feature, but in the end it was just a waste of time that had pretty much no impact on anything at all. The thing that really annoyed me about it is that you'd go and capture some territory and then all of the sudden another area you control is under attack, its just irritating and wastes time. The car customization was pretty cool, but it didn't really matter since you'd customize it, then drive it around the corner and it'd explode. The whole thing about you character changing depending on how you play was cool, but it felt more like a slapped on novelty than a true addition to the game play formula. There's more guns now, along with a cool parachute and jet pack. There's also bicycles now. Another thing that ticks me off is the idiotic story. It starts off well enough, but ti gets really stupid really fast.
Overall it just seems like a cash in, but its still fun to play thanks to the winning GTA formula. It really feels like they catered purely to a very immature and gangster/rap obsessed audience, most of which are too young to play this game, but their parents buy ti for them anyway. Then when the kid acts out they'll blame the video games rather than their bad parenting and demand more control and restrictions over the industry.