Graphics
Rather than polygonal characters set upon a pre-rendered background, Xenogears is a fully polygonal, fully explorable 3D world, with hand-drawn, sprite-based characters. This technique is absolutely magnificent. The characters do lose a lot of definition, but the areas you'll visit are better realized and possess great depth. Slowdown does occur often in some towns, such as the Bledavik market, but is only a minor gripe in a great game. Also, the animated CG movies are amazing(there are over 30 minutes worth). The anime sequences are developed by the same team that worked on Ghost in the Shell, and do not disappoint.
Gameplay
Xenogears is a turned-based RPG, but installs a combat system called the Active Time Battle, which relies on the physical attributes of agility, speed, and weight, to determine when you may launch an attack. Also, the characters have 3 different attacks, weak, strong, and fierce. These can be linked together in different combinations to learn new and deadly attacks. Finally, do not forget the use of Gears, for which the game is named. While fighting in your gear your attacks consume different amounts of fuel, which can be expended. Allthough the battles are usually not that difficult, the game avoids the constant RPG pitfall of needing to fight forever to level up.