No. To get graphics like that, you need a whole new system.
The graphics will get better as the years go on - once the programmers use all of what the system has to offer, (See: Gran Turismo 3 vs Gran Turismo 4), though - it will never have enough power to get anywhere close to what the Ps3/360 does, let me explain.
First of all, the processor isn't big enough to handle the power the graphics would generate - thus creating a bottleneck. Also - it has very little GPU memory.
CPU: PowerPC based "Broadway" processor, made with a 90 nm SOI CMOS process, reportedly† clocked at 729 MHz
GPU: ATI "Hollywood" GPU made with a 90 nm CMOS process, reportedly† clocked at 243 MHz
Memory: 3 MiB embedded GPU texture memory and framebuffer.
360?
Custom IBM PowerPC-based CPU
• Three symmetrical cores running at 3.2 GHz each
• Two hardware threads per core; six hardware threads total
• VMX-128 vector unit per core; three total
• 128 VMX-128 registers per hardware thread
• 1 MB L2 cache
CPU Game Math Performance
• 9 billion dot product operations per second
Custom ATI Graphics Processor
• 500MHz processor
• 10 MB of embedded DRAM
• 48-way parallel floating-point dynamically scheduled shader pipelines
• Unified shader architecture