well this is a nice find. Was looking on the Forza 3 PC support forum and found two interesting fixes. One to fix the blurry photo mode, and two, to really ramp up your fps. Not sure if anyone has read it or posted in here.
For blurry photo mode, the fix for this is - as soon as the game launches, get it into full screen ASAP, maximise the window or alt+tab as soon as the game starts to load. You want it in full screen ASAP!!
Second, to fix the low fps. When at the start of a race, alt+tab to put it into windowed mode, then open up a google chrome web page then close it. Go back to the game in windowed mode, and you should see a huge bump in fps. When you do, then alt+tab again to go into full screen and voila. Doing this I've got my game running locked at 72fps everywhere @1440p (apart from surfers paradise but I believe this is just crud coding and will never be fixed)
just a heads up just in case anyone missed it.