Jesus people, they went through the same thing with SH2 screenshots... "I think they are FMV!" "I think they are pre-rendered!" But they WEREN'T because they game just looked that good (although it was brought down a bit by the filter they added to the game, although you could turn it off after beating the game)... And this game looks even better (which is a no brainer since all sequels seem to improve graphically over their predecessors)...
As for the comment mickydaniels made about hating realistic graphics because it's like you're playing a movie or something... Well just because games look real, doesn't mean they can't still be very fun and game-like... and since this game relies heavily on atmosphere and stuff (and good graphics enhance that), realistic graphics are a good thing... I hope they eventually remake Silent Hill 1 with good graphics... maybe on PS3 or something... Because IMO that game had a better setting and atmosphere and style (like it perfectly switched between the crazy world and the 'normal' world, whereas SH2 spent too much time in the 'normal' world), but the scariness and atmosphere was brought down by bad graphics... But wuteva SH3 will rock
As for the camera... I think it's supposed to be basically like Sh1 and 2... which is kind of a typical behind the back camera angle, although it does switch to some more cinematic stuff for some areas, and you can resituate the camera to behind your back by hitting a button... But I havn't actually played the demo, so maybe they've changed that...