I competed in a GTR competition at E3 this year. First time ever trying the game, and I finished in second. I ended up winning a signed copy of the game, and a few t-shirts and hats. First prize was a $6k computer. :/ I posted about it here just after we got back.

Anyway, GTR looks nice, and it definitely can be fun, but it has some serious flaws. One is the netcode; basically, it sucks. The physics are fairly accurate, but if you really want a real racing simulator, try Live for Speed.

I have been playing LFS for a few years now, and I can say without a doubt that it is the most realistic and fun sim I've ever played. The physics and car "feel" are far better than GTR, and the massive amounts of car setup options you can tweak really adds to the competition between drivers. What really makes the game is the online aspect. I run an LFS league called the North American League that races every week during an eight week season. Great fun. As a matter of fact, our next season will be opening up soon for registration.

LFS is also unique in that it is developed by a small team (3 people), and they are regulars in the community. They answer questions, add things that are requested, and fix bugs quickly. It reminds me of this community, actually.

Edit: Oh, and there's a video of Tim doing his winning lap linked in the RSC forums post.