A bit late to the party, but I was recently reminded of this thread. It comes as no surprise that I greatly enjoyed the art direction of Xenoblade. The fact that the land of humans is on the surface of a dead god is pretty amazing in itself, and the game really shows what the Wii's hardware is capable of.
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Another game that I want to mention is The Last Story. It gets enough flak from people who don't like its grey/brown visuals, but I'm a sucker for medieval settings, and it reminded me of Vagrant Story and FFXII to a certain extent.
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There's also Thief: Deadly Shadows, with its excellent mixture of dark fantasy/magic/steampunk. I've already did a rather lengthy playthrough demonstrating how awesome it is, so I won't bother to post pictures. Just go to the EP LP section, randomly select one of my Thief videos, and enjoy the atmosphere. :wacko:
I'll second Odin Sphere and Muramasa, even if the games themselves are pretty shallow, with the visuals being the best part.
As far as creative level design goes, I think Psychonauts is amazing. There's no single level in that game that's not unique/memorable in some way.
And I've already mentioned Vagrant Story - I love its visuals, pretty much for the same reasons as The Last Story.