Also with blocks you can CSG subtract, so you can shape blocks into what you desire. Want a window, cut one out, want door, cut one out.
http://www.mapmodnews.com/images/library/image/mw2/mw2_mp2.jpg, The car is a model, the two buildings are 2 blocks with minor CSG subtraction combined with a few models (pipes, barber pole) and for that extra "real look" sprites like the ad's on the wall or the logos. But most of all that makes it look so nice is the textures combined with shaders and bump mapping. In conclution: combine blocks, models, and sprites.