If you were playing Gears, you should have some kind of access to Oblivion. Looks way better than Morrowind.

As for your question, 'all of the above' would probably be my answer. It really does depend on the style of the game, though. If Gears of War suddenly burst into a flowery meadow with a fluffy bunny dancing through it, it would have ruined the experience for me. There are some areas later in the campaign that feature more colours that produce some pretty amazing lighting effects, but you're right it is mostly shades of grey.