It does have nice graphics, not so big deal, but it's good.
About the gameplay... it's really good, challenging, but in my honest opinion: short main storyline.
I've completed the game twice, but because of bugs, you may not be able to play certain quests, and may not progress in certain ways.
Apart from that, I really like it!
I'm over 250 completed quests, 2000 monsters killed, etc...
I don't really care about physics, it's almost like Gothic 3's, but it's probably improved.