Yes, I think Stefano (Kunos) has slightly overdone the textures a bit, but maybe it's just in the screenshots. For example, rFactor looks absolutely terrible in screenshots, but only very bad whilst playing. Maybe Netkar will look better in motion.
There are a lot of things that excite me about nKP:
Visible Tyre Wear - not only different textures that 'fade' into one another to indicate tyre wear and condition, but also variable bump mapping so that the area of the tyre being 'used' is visible and changing. A real tyre looks slightly darker where it's rolling on the ground as camber and load change. It was Android who suggested this to Stefano
Tyre life - when you start a session you have the tyres on that you last used. I'm not sure if there is a tyre limit, in which case most of the time you'd want new tyres, of if scrubbed tyres are modelled as being better.
Setups and repairs take time - Crash your car, and you have to wait for it to be fixed. Wander the pitlane and other garages whilst you wait. Not sure of the total implications of this - I don't want to wait 3 days whilst they ship in a new monocoque...
Doom Mode - first person walking sim. Wander the pit lane. Peer over the pit wall and watch the race. Visit other garages and check their cars out. Not sure if you can 'see' other players walking around, nor how useful this will actually be, but it's nice to see a new feature in a racing sim.
Wheel Tethers - as discussed in ASS, stops the tyres from floating away in an accident. Maybe to stop it behaving in a silly fashion as the bounce model is crap, or maybe because it'll stop stray tyres interferring with other peoples races.
Clickable controls in cockpit. To start you engine you flick the switch. I guess they'll be keyboard shortcuts as not everyone can reach for the mouse when driving, but nevertheless it's something that can only add immersion if you want it.
Advanced Synthesised Sound - sure we have this in LFS, but from what I gather nKP has taken this to new heights, with backfires, resonance, cam timing, throttle opening, and damage all (apparently) effecting the sound. How it compares is yet to be heard, but I think it'll show the way to LFS.
Areas I think it'll fall down on
Tyre modelling - not necessarily the friction model, but the way the carcass moves under load. It's a nifty thing LFS has, and the car rolling onto the sidewall really makes a difference. Also LFS is the only sim to 'feel' like your in a car, and Netkar will either join it as the second or remain in the 'must do better' category.
Damage - no word on this afaik. Wheels can be ripped off, and suspension damage is modelled affect camber etc a la LFS. But whether or not is has bodywork damage or clever stuff like radiator damage etc isn't yet known (to me).
Graphics - will the shaders and advanced DX9 stuff be overused, or used only if absolutely neccessary. One of LFS's strengths is the simplicity of it's graphics leading to a very real look. Not sure if nKP will acheive that, but we'll have to wait til we see it on our own monitors.
Multiplayer - Apparently the collision code is better than LFS, reducing the effect of lag on what would be minor collisions. But LFS is much cleverer in other ways. Speed of joining, ease of chatting, sending setups and skins without creating (much) lag. Whilst LFS doesn't have great collision detection yet, I think it's still the best netcode going overall, and I'd be surprised if nKP beats it, at least at first.
Lack of cars - only open wheelers, although Kunos claims he'll add other car types as and when. But does this mean the code is optimised for open wheeler single seaters? Namie was only any good with the F3000 car. LFS has the ability to model any car type very well (although current tyre issues make the FO8 a bit too squiffy for my liking, although it should never become 'easy'). It makes you wonder if nKP has physics that only work with single seaters...
This isn't a definitive list, so don't flame me if I missed out something big, I just wrote this as it came to my head. I fully expect nKP to be the only sim capable of carrying a candle to LFS, but which one is better (and which one retains the lead as patches are developed) is going to be a close call. Right now, I'd say nKP will have the edge, but only just, and only til the next patch is released. But who knows.
I'm not going to get into all the hype - I'm basing my excitement purely on the facts that have been presented to me, and not rumours bandied about by the nKP community.