I think raytracing is not the answer to the ultimate photo realistic environment problem. Raytracing does work very well on certain types of objects, which can be expressed mathematically precisely such as spheres. The basic raytracing has problems with shadows (they are too sharp), etc, better shadow algorithms require exponentially more time. Probably rendering some objects with raytacing and applying other methods elsewhere will give better results. But raytracing is a method which can easily be parallelized, for ex. to multiple processors or to multiple circuits on ASIC, thus scaling up the performance.
Vahur