I am not sold on Forza, if it is ANYTHING remotely like the first Forza then I will not like it. Unrealistic handling properties on cars make it drive like a video game and not a simulator. Again this is pure speculation based on my playing the original. I have yet to touch the follow up on a 360 yet.
That said, the benchmark that all aspire to dethrone is
Gran Turismo the drive is very close to the real thing. Driving the correct line, the right braking point, hitting the apex and on the gas at the right time will reward you with a very nice lap times.
I still feel GT4 is the best most realistic simulator out there. I have tried and still own the original forza, Driving Emotion, Toca Race Car Driver 2, Need for Speed, and many more in an attempt to find something comparable to GT4. Nothing has compared I always end up back on GT4.
I have the seat and wheel pedal set up as well and it works great, the only thing missing is the seat of the pants feeling.