" From the start, the GT series has tried to incorporate as much of the racing experience as possible into a single game, which each new iteration adding finer details to expand on the main racing mode of the game. With GT4, that focus has shifted – albeit only slightly – to include what Yamauchi describes as “the human element” ( which complements the car and environment elements that were previously held in the fore). This is a catch-all description that encompasses not only people themselves, but the smaller touches they add to the races. For instance, on the rally courses ( which feel incredible with the new Logitech steering wheel, but more on that later), literally hundreds – if not thousands – of people are now animated on the sidelines and actually react to the races instead of being canned, cycled animations, so when a car comes around a bend and sprays dirt into the onlookers, you’ll actually see them cover their faces with their arms. "
Source... http://www.psx2.com/previews/preview.php?preview_id=312
" In order to make the human movement more realistic, Gran Turismo 4 will use a physics engine similar to the one used to simulate the cars´ movement in the game. The human engine program went under development five years ago and has finally reached a useable level, but Yamauchi said that it will take another 10 years for the engine to be perfected. "
Source... http://www.gamespot.com/ps2/driving/granturismo4/news_6077325.html