I'm LFS S2 licensed also, and feel that this is the most accurate automobile racing simulation available on PC today. While LFS has not concentrated on things like Licensed cars and tracks, daytimes that elapse to nighttime, and weather effects, it has concentrated intensely on vehicle dynamics and handling, and how the car, suspension and tires interact with the track. With several different suspension geometries in-game, each deformable tire also has several temperature zones, which accurately simulate wear and tear, hot spots, cold spots, and flat spots, as well as inflation. The tracks, while not copies of real tracks, have many elements of famous tracks, and are also highly polished, which makes them a joy to race on. No other simulation has the same level of sophistication when it comes to automotive physics.. While it may not yet be perfect, it still surpasses even it's closest competitor in outright accuracy.
That being said, plenty of other games are chocked full of licensed cars and tracks, that have been poked, prodded and polished to a point that almost maps out real life cars and tracks on a level where many are accurate within inches. However, not nearly as much time has been spent to make the driving physics more realistic, so many games will have community mods that enhance driving experience, such as rFactor + Realfeel plugin.
Basically there is a balance which has not yet been reached between simulation accuracy and use of licensed cars.. It's either one extreme or the other. Live for Speed is the best simulation, while rFactor has the best cars and tracks, the individual decides what is more important to them in a simulation.
Everyone should definately try out the Live for Speed demo, the 3 cars included are very fun to drive, and scale well to beginners if you start out driving the hatchback, then go to the rear-wheel drive coupe, and finally the BMW Formula. Keyboard or Mouse can be used to drive, but a force-feedback steering while is highly recommended! If you have a DFP or G25 already, but haven't played LFS, you are seriously missing out!