Better than I wanted it to be...
First off, the livery editor is very good and a lot of fun to use when you have time to sit down for an hour or two. The car selection is excellent, too, and it seems as though they put a lot of thought into what cars make it into the game. The career mode is not bad, either, just maybe a little too linear. I think it could have been a little more open ended, although you can sort of force it to do races with the car you want to use by being in said car.
The multiplayer is excellent, whether online or off. I've had a blast grabbing a buddy and doing endless drag races of cars to see, once and for all, which car is faster. Questions all of us car guys have had, such as 'I wonder if the 1980 Trans-Am is faster than a Civic Type R?'. (The answer is definitely no) The online works well too, although you should make sure you practice before going on, or start in the drag races or the tag modes so you have a chance. Circuit races are where the most serious racing takes place. If you have a little bit of patience by staying in a room for a while, you'll generally weed out those who actually want to race from those who want to be jerks. Just watch out for the first turn - the noobs usually cause an accident.
The replay value is strong, and the tuning in the game is outstanding. When I first got into the game, I thought the tuning was decent. But what put it over the top for me were the swaps you could do. Aspiration conversion, drivetrain conversion, and, best of all, engine swap! One thing they missed, in my opinion, was not allowing Hondas to be AWD. Why not? I used to own a Honda that was (87 civic wagovan). But, really, this is just something small to nitpick.
Lastly, we have the physics. Ah, the physics. Previously, this is how I judged a racing game. If FM3 was judged completely on this and nothing else, it would be a mediocre game. The cars are just a little too grippy, and you are not punished very severely for going off the track. But guess what - that isn't necessarily a bad thing. See, the reason I gave up GT5 was because you couldn't just grab a controller and play. I always like driving with the assists off completely, and for GT5 I had a wheel, cockpit, and it was awesome. But, I had to drag all that out to play, even if all I wanted was a quick race. Forza was much easier. I could turn all of the assists off and still race with the controller.
That being said, Forza is light years ahead of the likes of Need for Speed and virtually every other console racing game for physics. This game feels very polished, the difficulty is just right no matter what your skill level is, and overall it is just plain fun. Turn 10 did a superb job of making a game that appeals to both newcomers and racing vets alike.