This post probably won't be well organised as I am just writing as it comes to me.
In Car View: Many games have in car view, but it never really holds my interest. I use it briefly to test it out but usually end up going back to hood/bumper view as I find it to be more distracting than anything. Grid was like that for me and Race Pro has the same issue. I can't put into words what exactly I didn't like about them, but part of it had to do with limiting view and making it a lot harder to hit an apex (for me anyway) than using the bumper or hood views.
What ever turn10 has done differently works. At no point while playing the demo did I think "Hmm, I'd be faster in hood view because..." While I did switch views a few times just to see how different angles looked, when I was actually racing I stayed in cockpit view. Whatever you did Turn10 I love it and plan to use cockpit from now on.
Rewind: I was never a fan of rewind, but I admit in my first few races I used it. Mostly because the AI kept hitting me up the rear and it was frustrating, so hey at least it does what you intended, stop the rage quit. When it comes to general usage, It's going to be very useful for learning specific troublesome corners, particularly on the longer tracks.
The one and only thing I don't like about it is that I can't choose where to restart from. I would have much preferred to have a live rewind feature similar to Grid/Dirt 2 that allows me to stop at a chosen point rather than it automatically rewind to specific points of the game's seemingly random choosing.
The Clutch: I won't say anything about it's overall addition as the clutch is really a personal thing, I chose to use it. What I don't like was the choice to stick it on the LB slot. I think it would have been better suited to the A button. I never use the e-brake except when I try and drift and that would have probably been better mapped to the LB slot so the A button was for the clutch. It's a lot easier to hit the A button and X/down shift with the thumb than it is trying to brake and down shift in the current layout. The more I play with the controller the quicker I am adapting to it, sooner or later I probably won't care, but on immediately picking it up it feels awkward. Alternatively it could have been mapped to the Y button, not as easy to hit but it's not like the look back button is needed when you can just hit back on the RS instead.
Physics: The physics are better. There's more sense of weight to the cars, you can feel what the car is doing even through the controller. When I touch the grass or knock the wall, every thing happens how I would expect it to. I don't feel like the car is going to over steer when it shouldn't and when I brake too heavily or too late, the car under steers and it feels completely natural and above all else, improved over Forza 2.
When I jumped in the Porsche, I immediately felt the difference from the Ferrari. Right from the first corner I knew that if I didn't concentrate a bit more than in some of the other cars, the Porsche would stick me in the wall backwards. It truly felt less forgiving to slight lapses and heavy footedness.
Controls with controller: One thing I felt straight away is that the controller felt much more accurate this time around. In Forza 2 I didn't have confidence going into some corners that I would hit the apex as the LS didn't seem as accurate as I would have liked. A good example of that is the left hander at Mugello where the track splits from the longer and shorter variations. I never felt confident at speed on that left hander when using the stick, but I did using the wheel.
So far the controller has felt perfect to me. At no point did I feel the controller wasn't giving me enough accuracy to take the corner as fast as I feel I can. It was much more natural and flowing as it should be.
Controls with wheel: I also used the MS wheel to see the difference and to be honest, it felt just as natural with the controller as the wheel did. The brakes don't seem quite as sensitive without ABS on any more which is an improvement for my heavy left foot. The only thing that might slow you down at first is the A button clutch. I don't have huge hands to reaching for the A button on the wheel while turning or changing gear is a stretch, but it's something I will have to get used to until I can afford the clubsport pedals for the Fanatec wheel. All in all the wheel feels exactly like it should and operates perfectly.
Graphics: Well, I'll leave this one to Homer.