I think Jim should have drawn a distinction between graphics and aesthetics. I'll agree that colourful and bold are better looking than gritty and dark but we're kind of talking aesthetics as much as graphics with that. Graphics wise Viva Piñata is good, but not great, it's the aesthetic which brings it up to make it look good (and the same can be said for similar games). Other games are graphically superior but make poor use of the graphics or attempt photo-realism, I'm with Jim on defending that but I agree that it is worse looking than other ideas.
I do disagree that Viva Pinata is the best, I think they go over the top with the boldness of it all and I prefer a subtle but bolder than real life look. I wish the 'gritty' games would opt for more colour, I think it works a lot better to contrast the horrors of what's going on with a real and colourful world. Go to a park, looking down my road in the sun there are LOADS of colours. Those games forgo them to make the world grey and brown and it loses that appeal for me. I'm trying to think of where I've seen it done well and I can't remember but I have, a horror filled world which is brutal and cruel yet is still colourful and quite pretty. It works, it really does.