The gang at Polyphony Digital has been talking up—and failing to deliver—car damage in Gran Turismo for what seems like forever. We know it's coming someday, it's just that Kazunori Yamauchi told us it was coming with Gran Turismo 5 Prologue when we talked to him at Games Convention. Didn't happen, though.
According to an interview with IGN, it may still be en route, via a software update. And it may be coming as soon as this spring. We will, of course, believe it when we see it.