If you by any means haven't had the chance to read this, here's your chance!
I know it's old, to be honest I myself just recently read it and this has absolutely increased my confidence about Hideos producing capabilities.
This is very old, but by all means I recommend that you read it if you haven't, although it might be very much to read!
The article is about the final hours of MGS2 and how the critics didn't believe that such a game was possible on the PS2, both visually and audio wise.
If we are to see a better looking trailer at this years TGS or next years E3, we shouldn't immediately jump to conclusions and say that it's pre-rendered, because from what I've read, we absolutely shouldn't underestimate Hideo Kojima!
It's a very good read, you won't regret reading it!
Here's a bit of what was written back then:

(refering to E3 2000)

"Metal Gear Solid 2 had become the game of the show. While Kojima insisted that the video trailer represented in-game footage, some cynics suggested the images were too good to be true--there was no way a game could actually look and play like that. But there was no question that the trailer was impressive. In the span of a few short days Metal Gear Solid 2 had quickly become the most anticipated PlayStation 2 game--and it was still at least 18 months away from release."

If Kojima states that the graphics shown at this years E3 will get even better, I have my reasons to believe him!
Enough of me babbling, here's the link!

http://www.gamespot.com/gamespot/features/video/btg_mgs2/index.html