I found out why cars and objects show through scenery. It's because we have AA turned on. I noticed AA didn't seem to be on everything, so the track seemed very jagged, even at 6x AA. So I decided it would be best to got 1600*1200 with no AA, and right away I noticed the motion blur effect looked a lot better. I could actually tell there were blurs when driving straight, no AA made a huge difference, I guess there's a glitch with the motion blur effect and AA. Then I noticed there were no more objects in front of the scenery.
Give it a try again with no AA but with at least 8xAF performance at 1280*960 or 1600*1200 if you can.
The game will be much better than you thought, for those who played with AA before.