Gaming pretty much turned to crap after the Dreamcast died. It was like the last good system.
And, yes it's games looked, and more importantly felt, way better than PS2 games.
It's not even about the hardware. The Dreamcast was the last system of games that were creative, and fun. It was the last bastion of the era of games that had a cool comic-book/anime/cartoon feel to them (said era started with the NES), and the PS2 was the start of the current era of games that feel like boring mainstream Hollywood movies (BTW I HATE boring mainstream Hollywood movies!!!).
I have never played a Dreamcast game I did not enjoy, Jet Set Radio, Space Channel 5, Sonic Adventure, Street Fighter 3, Soul Calibur, Grandia II, and Shenmue are all some of the best games of all time, and while many have ports and sequels on the newer systems there's no one system that has ALL these games on it like the Dreamcast does.
The whole generation that followed was nothing but a stream of crappy Grand Theft Auto clones (I DESPISE GTA AND ALL IT'S CLONES), boring stealth games, and repetitive 1st person shooters.
I'm interested in the Wii for it's unique controls, and classic game downloads, and I love my DS (or at least I love New Super Mario Bros., and I know there's a Code Lyoko game for DS, and I adore Code Lyoko). But, aside from that, and indie games (SUPPORT THE INDIE GAME INDUSTRY) modern games can pretty much kiss my bitter old-school-gaming posterior.