The quality of Toy Story indicates it has a little bit of a way to go, but it may only take a few years.

Actually, Squaresoft, the makers of the final fantasy video games is making a theatrical film with the same title. It will be totally CGI, and they are claiming that it will be photorealistic. There is a teaser trailer at the official website

I have seen some still images and some bootleg footage of the film that was shown on japanese television. Looks very incredible. puts the cgi in Phantom Menance to shame. While I won't say that is it photorealistic.. it is 99.5% there. Very Amazing.