I don't find the graphics in game to be lackluster overall, but they DO seem inconsistent. This is far more noticeable when you encounter terrain that's repeated with the same sub-par textures. The cliffs in Ul'dah in the waterways around Gridania are fine, yet both are lacking in Limsa. Limsa has some very nice lighting at night, while Gridania's is lacking.
As someone who's played Aion for more than a year, I can honestly say that even with the current engine, Aion's character graphics beat FFXIV. Although the faces aren't as realistic, Aion's character models in terms of armor, clothing, and weaponry have a level of polish that I've yet to see in FFXIV. Both games have texture problems, however, when it comes to terrain.