The "uncanny valley" is the name for a phenomenon in computer graphics where the closer something looks to reality, the more the mind rejects it as being real. When you see something like a cartoon--say, Finding Nemo--you don't think about it being real. You don't notice all the little flaws. However, when you watch something closer to real--like Final Fantasy: Spirits Within or Lord of the Rings--your mind starts noticing all the little things wrong and rejects it. It feels more "unreal" to watch something close to realistic than it does to watch something bearing little resemblance to reality. The BBC recently had an article talking about this phenomenon and games. Crossing the uncanny valley is the goal of creating something so lifelike that your mind stops rejecting it as unreal.
In the case of still images, pictures like this new picture of Korean actress Song Hye Kyo, seem to cross it. Here is an article talking about the creation of the picture in 3D Studio Max.
Creating a realistic picture is only part of the solution though. Getting them to animate fully realistically is the next challenge. Still, this picture is pretty amazing.
Hat tip to Kotaku for the story.
Update: Looks like the site was taken down. Hopefully it will show up again once it falls off the pages of the big news sites. In the mean time, the Kotaku article has the picture and the photograph.