Well this is taken from PGC.
Quote:
Q: Does Super Mario Sunshine still look like crap?
Rick says: NO. The game looks great in motion. The game will FEEL like the N64 title, because it’s SUPPOSED to. Also, the textures in the background objects are PLACEHOLDERS. They are Mario 64 textures, and are just there until the final textures are in. The game is very smooth, running at 60FPS, with loads of animation frames.
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Take it as you want. Just remember that Rick went to that Gamers' Summit held in Seattle so he may have been able to clarify it with a rep or something.