GT4 is OK, but overall a big disappointment to me. The never fixed the damage engine so you can bounce off other cars with no worries.
My preferred game by far is Toca Racing (by Codemasters). Fabulous online engine (8 people race together), great tracks, good physics, and a realistic damage engine which rewards clean driving. We do have a league that races regularly (getting ready for a 1 hour endurance race tonight!)