I was watching G4 on TV and one game people may not know about is Forza Motorsport 4.
I've been playing it since before Christmas. Compared to every other racing game it totally rules. Imagine getting into any hot car in the world and taking it for a spin on any Grand Prix track in the world. It is so realistic you almost can feel the wind going thru your hair. It's made by Microsoft. It is also Kinect enabled. Need for Speed sucks compared to it.
Racing games come in a lot of classes.
Hardcore sims like the GTR series place a great deal of focus on realism. Expect to run a G27 series wheel and spend more time tweaking suspension and sub-systems as you do racing. Sims are unforgiving and require absolute perfection in driving.
GTR, GTR2 and GTR Evolution, by SimBin
On the other extreme are the arcade games. The Needforspeed series is where this is at. Floaty controls and no attention to reality. The "Underground" games were designed to appeal to kids with rice burners and feature Scions that outperformed Ferrari's - to appeal to the fantasy of the kids buying it.
NFS Shift (1-2) is an exception as the "sim" entries of the series, though not of the GTR level.
Then there are those in the middle.
Dirt, Forza, Test Drive, Blur, etc.
These don't take themselves too seriously, but they aren't the absurd arcade games of NFS or Midnight Club. More approachable than sims, but not silly like the arcade games, these tend to be the best sellers of the genre.
There are race games for every taste. Want to get in an F1? You can, but you have to work for it. Want to do some casual Rally Cross? Dirt3 is there for you. Want to play with cartoon cars? NFS is ready to go.