At the IDF, Intel's Pat Gelsinger showed a short video that shows two scenes: One real life Africa scene and then after a smooth blending a Far Cry 2 scene. German website PCGH.de has this video on their page.
What's interesting: The video was part of a presentation that deals with Visual Computing and Raytracing. So while there is no Raytracing at all with Far Cry 2 (it's tradional rasterizing), Intel seems to be confident that this will happen soon.