Kotaku got to meet with Kazunori and have written a lot about their experience with GT 5, including that it WILL feature damage, better AI, and better physics. This will definitely please GT fans, especially the physics but even more so the AI. http://kotaku.com/gaming/gc07/gran-turismo-5-prologue-to-feature-car-damage-improved-ai-better-physics-293208.php
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http://kotaku.com/gaming/gc07/gran-turismo-5-prologue-to-feature-car-damage-improved-ai-better-physics-293208.php