I have Kubuntu installed on one of my laptops and Ubuntu on the other laptop. This is the first time I have run a KDE-based distro on my primary laptop. To my eyes, Kubuntu is more aesthetically pleasing out of the box and it seems that I have more control for fine-tuning the look and feel.
The latest Ubuntu is definitely an improvement and looks better than previous versions. However, Gnome is still lacking in the graphics department. I have been trying to get one of my friends to install Ubuntu. A while ago she installed Intrepid in VMware to test out on her Vista machine. Her comment was, "It looks kinda like Windows 95". I definitely disagree with that, and if new themes are added and Desktop Effects are running, there is no comparison.
However, the default look is rather flat and boring, especially after fresh install. The flat grey task bars that run across the top and bottom could be improved. The default windows decoration looks pixelated at the rounded corners and I don't think the shade of orange chosen looks that great (especially when combined with the light grey). It does look kind of drab and not slick as do the other flat grey empty areas in windows.
I don't really care, because I have spent time on gnome-look and found themes I like and can make it look very good by choosing some non-default themes (although there are still some annoying issues with very dark themes). There are some things I like better about Kubuntu and things I like better in Ubuntu, I use both.
I do agree that there is a lot of room for improvement in the aesthetics department (is this an issue with Gnome and the tools it provides for theming?) so that there is more wow-factor and a more slick look and feel that greets first-time users. Aesthetics and first impressions should not be underestimated.