The 360's crappy hardware is gimping GTA IV
This is one of the first times I've seen a company acknowledge that making a multi-platform game ends up limiting what they can do. Normally that sort of talk is up to fanboys - not Vice Presidents of major companies. It's a shame to hear that the 360 is limiting what GTA IV can become, but hopefully Rockstar takes a queue from The Darkness and adds-on a bunch of content to fully utilize the space that Blu-Ray offers.
Oh, and to be fair - Rockstar also said that the PS3 offers it's own challenges that they have to overcome (cough, the Cell BE, cough).