How in the world do you get 3d models to look like they are 2d? I think its called cel shading, but I noticed that on the Naruto XBox360 game, the graphics are alot different than the Naruto games for the PS2, even though they both use cel shading.

there are many different cel-shading shaders, along with this you can also have variation in diffuse texture styles. the 360 has a lot more vid mem than the ps2, so perhaps the devs were able to take advantage of this with their diffuse and shader complexity.

Also, a trick from Okami:

The black outline that all characters have (or, how to give every 3d object a nice "drawn" ouline to mimic animé) is a simple process of creating a duplicate mesh of your object, expand it in size a little bit, paint it completely black, and turn it inside out. (that's the laymen's terms version)

This creates a black mesh that only shows up when there is nothing else behind it, as your camera will look "through" the backside of the mesh (which is, in fact, the outside of its 3d object) and hit the frontside ("inside" of the 3d mesh) which will show up black. As the overall mesh is only slightly larger than the 3d object you're outlining, you get the visual appearance of a black outline to a 3d object that persists from any angle.

Its much more efficient to do the black outline via shaders... my guess is Okami did it that way more as a requirement from PS2 rather than a pipeline/artistic choice. But a cool technique to keep in mind.