I was hooked on PGR2 for a while. I have a couple friends with xbox 360 and they both have said that PGR3 and Forza Motorsport is prettier, but no more fun than PGR2. The xbox live really makes PGR2 a lot more fun.
My other favorite is Rallisport Challenge 2. It's a ton of fun. Much more fun to play solo than PGR2. It's a lot more offroad than PGR2.
Comparing them as solo games, PGR2 is all about making each turn perfectly, which can get kindof frustrating if you can't find the right line. Rallisport Challenge is just about surviving the race and beating the time. It's not as precise and maybe a bit more forgiving. It's still challenging and gets progressively more difficult, but it's a bit less frustrating.
From the xbox live perspective, PGR2 is just about perfect. It's easy to find races, it's fun to race, and playing cat-and-mouse and last-man-standing are a lot of fun.