Sarisio: About sprites you are right and that is probably one of reasons why it aged well. Early polygonal models were rather ugly even in their current time (people with square heads and square shoulders? ugh...).
Yes. They look much more beautiful than early 3D models. But the flip side is they can cause motion sickness if your brain gets used to games with real 3D objects and then when you play a game with 2D sprites the object always faces the same way no matter how you walk around it.
dtgreene: What about games like Zelda: Ocarina of Time, in which some objects (like trees) are actually sprites, but most of the objects you interact with are actually 3 dimensional?
I believe Super Mario 64 was like this as well.
I don't know. Never played them so I can't comment. Depends on how important these are.
Even real 3D games use some 2D sprites for objects that are too small or too far away (no one expects real 3D clouds in the sky). If the trees are just background decoration I'd say it can be classified as a true 3D game. If you can walk around them and they're just sprites I'd say it's pseudo-3D.