I think the uncanny valley actually hurt the most in the previous generation (PS2). FFX and XII in particular made me uneasy, and let's not even talk about Spirits Within. In this generation graphics have gotten a lot better and I think we've evolved 'past' the uncanny valley. The uncanny valley, to me is the place where 3D models try to replicate human features but lack the finesse to do so. At this point in time I think we do have the technology to do this accurately enough that it's not bothersome. Games like Red Dead Redemption, the Uncharted series, or even FFXIII have very realistic looking people but don't bother me at all. Either they got better at it, or I got desensitized.

Still, I do like it when games don't try to have super realistic looking characters. I play games to escape reality, not live within it. Borderlands is a great example of a game with detailed human models but done in a cartoonish way that it isn't awkward at all.