Part of it is that the instrument samples are a little synthy sounding, although i\'ve heard far worse hehe. I seriously doubt a live orchestra would be willing to devote their time to recording music without some sort of compensation. And for the record, to help clarify the OGG Vorbis stuff:
http://www.vorbis.com check the faq section if you want to sate any curiosity.
In a -very- general sense, OGG Vorbis files are equivalent if not better than mp3 files. However unlike mp3, OGG Vorbis is released under the general public liscense. So, if you were to use ogg vorbis format in a marketable product, you wouldn\'t have to pay a royalty to vorbis. If you used mp3 in a marketable product, you\'d have to pay fraunhoffer for use of their technology.
However, since ogg and mp3 encode differently, meaning they remove different bits of data, it is -not- recommended to directly convert from mp3 to ogg vorbis, or vice versa, since you would actualy -lower- the quality of the resulting file. It would be better to start with a WAV or FLAC file, which are lossless formats, and convert that to Ogg Vorbis.
Er, hope I didn\'t get -too- detailed. Some of the stuff can be a little confusing. Vorbis\'s site faq probably does a better job of explaining. Give it a read sometime

And for the record, most game music is synthesized. High budget companies usually have a composer who uses GigaStudio, and can afford professional audio samples recorded directly from orchestras, like... Garritan Personal Orchestra for example. These sample CDs often run for several hundred dollars. Gigastudio is a fairly popular sequencer.
From what I understand, Gigastudio is used for the music in CSI, and I think Jeremy Soule used it for KotOR, Morrowind, Dungeon Siege, etc. Just for an example of how versatile a good program, and good audio samples can be. Heck, even my ear was fooled into thinking it was live or recorded.
I have no idea what the composer/music guys here use, but I think they do a good job with what they have. Heh, all I have is -barely- a home studio setup. A near-death keyboard, some sequencers, and a ton of free soundfonts i\'ve dug up over the years. Well...most of em are free, some of em are demo/noncommercial uses only.