I just got back from Resfest (the cutting-edge digital film festival) in San Francisco. The short films and electronica music videos were simply amazing!
In the past (as recently as last year) people were showing off computer graphics almost as if they were shouting, "Look at me! We're using triangles! They're shaded and have textures!". This year I've seen a definite trend of using NPR (non-photorealistic rendering). If these films were talking, they'd be saying "Yeah, we're CG, but shhh! Don't let that be the focus." Everything's so stylized, and in some cases look so realistic, that you really can't tell it was created on a computer, even though you know it was. That's not to say everything shown was CG, in fact, quite a bit was live action or a hybrid, but at some point each one was digitally processed.
Really, the story and how it's expressed is what's important, and the visuals are secondary. In fact, one of the best short "films" I saw was a series of phone calls a guy makes and receives after a party. All that's on the screen is the text of what he says, slightly altered to say what he's thinking instead of what he's speaking. It was so well written and so funny. Still, incredible how-did-they-do-that imagery has its place and will continue to amaze us as long as there are minds to push it further (or until we can render images that are indistinguishable from real life -- so that means around 2005/Star Wars 3 ;)