The jump is noticeable (well more for the weakest graphic wise of last generation being PS2 and hte strongest being PS3 next generation) but it is small.
Look at the jump from SNES and Sega Genesis to Playstation and N64. Look how much smaller but still significant the jump was from those to PS2, Gamecube and especially Xbox.
My friend owns a Xbox 360 and I enjoy playing some games on it (I think Call of Duty 2 is amazing on it, so is Dead Rising and for pure visual appeal Fight Night Round 3) but it is so NOT WORTH $500 imo (what he paid for it). Unless it is a very stagey game like Fight Night or most sports games, the graphics at this point have to be sufficed to fit the gameplay. Sure this is early on and it will get more advanced, but while I see a difference between say Call of Duty 2 and most shooters in the Xbox, it seems rather small to me. Dead Rising actually looks worse to me than Resident Evil 4 did on the Gamecube (though that may have been a sacrifice to have such an interactive environment).
There is a jump, but it is not noticeable enough for my tastes. I think the technology change is so ridiculously small compared to SNES being pushed out by N64 or N64 essientially being pushed out by Xbox. These are more like upgrades than major graphic revolutions like before. Xbox 360 might as well be called Xbox 1.5 imo. PS3 might as well be called Xbox 360+ for that matter. Nintendo Wii is Xbox+ graphics wise, but at least while it is an insignificant graphical change, gameplay wise it may very well revolutionize controls as we know it. It is something new and different.
But for this change (which I think is far more drastic than the minor upgrades the 360 and PS3 are) I would NOT pay $500 or $600. They only cost about $20 more to make than Xboxs and PS2s, but they DOUBLE THEIR PRICES AT RETAIL? It is a RIP-OFF. If Nintendo had done the same thing I would have just waited for a good version of one of 'em to drop to $300 before I bought one.
I have better things to spend my money on than the same system with comparitvely (to previous generation changes) minor changes in graphical ouput. Just my opinion though.