The animation is silky smooth with virtually no slowdown, despite the fact that at later levels, you'll be managing several tables, several awaiting customers, and who knows how much in tips.
One issue with the graphics was the slowdown when there was lots of action happening at the same time on screen, like cutting up a bunch of bad guys (or indifferent guys since Travis Touchdown is sort of a baddie).
Morrowind proves that you can have smooth graphics and in-depth gameplay without pushing the limits of Big Green; Test Drive says that you can combine fast racing and excellent looks with no slowdown or jaggedness.
The in-game graphics are realistic and crisp, and the on-screen action can handle an immense amount of characters and cities at one time without so much as a trace of slowdown.
When things get really action packed, and the screen is full of chaos and destruction, things do tend to slowdown a little bit, but it's not enough to really matter.