Good graphics are essential to the game from a marketing standpoint, as others here have noted. In addition, if anyone recalls a few months ago Firaxis staff had an army of graphic designers on board, but few hardcore programmers (hopefully the latter has turned around). This pretty much cinches the fact that the civ3 team puts graphics as a high priority.
I would like good graphics as well, but not needless ones. Especially get rid of those damn heralds with Parkinson's disease (why does every game company think that good animated people= constant wavy/jerking motion!?) Who here thinks that civ1's diplomacy animation was better than civ2's? I liked talking to the heads of state face-to-face, watching their and their advisors' facial reactions!
As long as good graphics doesn't sacrifice gameplay, I'm all for it.