This thread is still going? Ok, some comments and updates:
Arcade = USA, Sim = Europe. In the Need For Speed series, there are (were, NFS4, NFS5, and now NFS7 and NFS8 servers are shut down) significantly more European players online than USA players. I've read that the NFS series outsells all other PC based racing games. Then again, when they bundle 4 games in a collection does it count as selling 4 games?, World of Need for Speed is 4 games, Need For Speed Collection is 5 games (only at online stores now), both selling for $20 USA. I don't know about console sales in Europe, but I assume most are sold in USA.
LFS - tire physics very much improoved in S2 alpha versions T and later. The addition of a F1 car was really nice. The LFS crowd seems to be a selective group, as I get the impression that a lot of LFS players don't play other sims as much. The non-LFS players seem to play more of a variety of racing games.
Real tracks - Nordschleife and Spa are the top two on my list. Advantage for ISI / Papy sims here.
rFactor - rFactor was sort of a cheat, making a game that relied on mods being made for it. At least it now in include some real tracks and cars, including the BMW F1. The McLaren F1 mod is good, and some sim team versus team racing used this mod for a series of competitions.
Simbin - a lot of the simmers are always waiting for the next best thing, GTR mods. rFactor mods, GTLegends mods, and now GTR2 demo mods (there are track (including Nordschliefe) and car mods for the GTR2 demo already). Simbin includes some real race car drivers on it's staff, that's got to help a bit.
All ISI games - I wish they'd fix the replays so you can hear tire sounds. You make a great run, but when viewing, without any tire sounds, it could just be a car with real sticky tires just cruising around the track, you don't get any sense of how hard a player was pushing when viewing a replay.
Papyrus - Grand Prix Legends, and Nascar Racing 2003, a lot of mods and tracks. Several real NASCAR drivers play NR2003, and those drivers state that the physics are pretty good (especially the trucks). Really good replay system, along with movie making, lap analysis and lap compare utilities.
ISI night mode - a GPU hog, both rFactor and GTR2 demo slow quite a bit when night or night/rain are enabled. On high end systems, With the GTR2 demo, FPS is barely over 15 at the start of a race at the back of a grid of 19 cars.
Personally I like all of these games, and non sim games like the NFS Series (but I didn't like HP2 much), Toca RD2 and RD3, World Racing 1 and 2, and even Ford Racing 2.
I have made videos from many racing games, you can get links to view or download them here:
racing game videos htm