Been trying this a couple of times over the evening, as a background I play iRacing far far too much on the PC which is a fairly hardcore sim.
Graphics:
Forza 3 is undoubtedly very pretty, my only gripe is a lack of AA, but it's not as bad as it could be,
Handling/Physics:
Similar to Forza 2 as far as I can tell with a pad, good as far as console racers go, however compared to something like iRacing it lacks a bit, saying that I would be very interested to play with a wheel, but only way that'll happen is if the G25 gets supported.
Sounds:
I like on the whole, bit odd though as I don't find the music in this a distraction but I do when playing sims on the pc,
Going back to a previous point, if this had G25 support I'd definately be buying it on release day, as it is I probably won't, plus I have reservations to the quality of the online racing compared to iRacing.
I am enjoying effectively hotlapping though, just spent a while with the evo, got down to a 1:12.186 registered, the lap after that I was up over a second towards the end but royally messed it up (it's nice that rewind laps simply don't count on the leaderboard

) so top 1%, reckon a 1:10.xxx is doable by me, I'd imagine the extra control of a wheel making that (relatively) easy...