I uploaded a smoother animation (twice the framerate, just click on the image to see the whole picture). This is just a simulation of what the final game should look like. Just to whet game developers' appetite for the coming age of real-time path traced graphics ;-)
I also added a flash effect when the ball hits the paddles (just emitting white light). Lots of different and fancy effects can be added to make it more arcady and pinball machine like, changing the color of the main light source, making the balls in the background bounce up and down and changing color and emitter properties on the fly, changing the color of the side walls dynamically to indicate difficulty level, enlarging or narrowing the room by moving the side walls, adding more than one ball to the game, ...
And another one with bouncing spheres in the background. Notice the dynamically changing soft shadows and ambient occlusion in the corners behind the spheres.
I also posted a video on Youtube showing navigation in the Pong scene on my Geforce 8600 GT M. I set the quality at 32 spppp (samples per pixel per pass): http://www.youtube.com/watch?v=OOpLyv7gvBE. Even on this very low-end GPU, you can still achieve pretty high quality interactive scene navigation at 0.86 fps.