I was talking with a few people last night about violence in video games, and the topic of the ESRB rating system came up, specifically wondering about games like "Grand Theft Auto III" and "Manhunt 2." Since I've been through a few rating cycles, I was able to add a bit of clarity to the situation.
The ESRB doesn't care about the quality of your content when it comes to violence. You could have blocky 3D models getting blown to bits and you'll get the same rating as high quality 3D models getting blown to bits. If you're going for an obviously cartoonish quality, you may get cartoon violence instead, but it's all counted as equal in their eyes. Violence against those who cannot defend themselves is considered particularly heinous.
The mitigating factor in rating violence is the consequences of the player's actions. Does anything bad happen to the player when they act in a violent fashion? Do the police come after them ala "GTA3?" Do they get a different ending ala "Silent Hill?" Does their game immediately end ala "Rainbow Six?"
I think that's the reason that the "Grand Theft Auto" series was rated "M" but "Manhunt 2" was rated "AO." In the "GTA" series, when you do something uncivilized, the police start after you and you are essentially running until you are either forgotten, arrested or killed. The world reacts to your behavior in a negative way. In "Manhunt 2," you were encouraged to kill viciously, without remorse and without penalty aside from getting killed first.
So the trick is that if you want to get a particularly vicious game made, make sure that there consequences to your actions. If there is a demonstratable downside to a player's actions, it makes it easier to justify your content.