We encountered a number of minor issues during the course of the game, such as characters who'd occasionally pass through walls (no, it's not a Force power), or dialogue options that would unexpectedly throw us back into the same dialogue loop. And the game doesn't really look any better than the original, but since it tries to get away with a few new graphical effects, its frame rate is often even worse, sometimes plummeting down into the single digits during some of the more-hectic battles. Given that the game's character models and relatively small environments aren't particularly detailed or attractive to begin with, this is rather unfortunate, since a role-playing game of this caliber really deserves better. On the other hand, the lightsaber action you'll be seeing frequently throughout the second half of the game is impressive, and the characters you'll be speaking with look reasonably good, mostly because their lips (again, if they have lips) are properly synced with their speech. All things considered, The Sith Lords looks fair at best. Fortunately, graphics aren't what's most important to a high-quality RPG.
^ from the review.
Sounds like a fair critique of the graphics to me. Of course, I haven't played it, but both IGN and Gamespot have the same problems with the graphics. They never said that graphics was the deal breaker. But their concerns about it are legitimate.