Yea, they've come so far. I remember back in like grade 5(1995) I was watching discovery and they showed this computer generated woman and I was in awe because her hair could move freely. Now they're able to do so much interms of texture mapping and bump mapping and also since the computers are much more powerful they can render more realistic images.
If you want to see amazing examples just look at a lot of the new movies out (star wars, LOTR). Also, goto
www.cgchannel.com for some amazing stuff.