I'm almost certain we will, I mean graphics are getting better and better all the time so logically they will reach a point in the not too distant future where they are photorealistic. As for animation, just look at Uncharted 2 and soon Uncharted 3 and Battlefield 3, they all have very realistic character movement what with mocap and that, and facial movements seem to be catching up what with LA Noire recently.
Although tbh even now there are moments in games when things look pretty damn realistic. There are times when it would honestly be hard to distinguish GT5 from real life, especially when watching replays, if you were to just glance at it you'd think it was real. Same with some points in ARMA II (particularly when flying).