TOCA 3 was a heck of a lot of fun. The AI is out for themselves, so to speak, and will crowd you into some bad spots like you aren't even there. I'd say it's above a common arcade racer though, other than the immense variety of racing it offers. The really nice thing about it is the damage system. No arcade racer is going to get you to take care of your car like TOCA3 does. Can't imagine how many times I've lost gears in there.
Physics take getting used to, and the wheel support is a little odd, but once you get going with it the game really is a blast.
TOCA 3 is on Steam, usually for a couple of bucks. That's where I got it for pc. Works fine on 7, doesn't have the SF issue.
Pick up NSF Shift 1 and mod it with the Overhaul mod at nogripracing. I could turn laps on that thing all day long. The best Nordschleife I've found so far.
Hold off on 2 until it gets another patch or two.
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