"Infinite" has a specific meaning. Had Jobs said "infinite pixels" he'd have suffered the same backlash. "Infinite detail" is deceptive because we know there's a practical limit. "Retina display" has no similar connotation. They chose that phrase so they could then give you a definition. "Infinite" already has a definition.
Wouldn't a fractal voxel octree generation algorithm technically be "infinite", though? You could zoom into objects as far as you pleased, and never run out of detail—which seems to satisfy any practical usage of the term "infinite detail" I can think of.
This gets into subjective perceptions of the detail in question. Mathematically, you are correct that fractals have infinite detail. Visually, however, it's noticeable when you've run out of interesting fractal detail and that the technique has failed to produce more detail (that the brain will acknowledge as such.)
Had they said "fractal detail" not only would they have received less grief for it, but they would have provided us with an explanation for part of their system. That last part seems to not be something they're inclined to do.
The detail needn't be fractal to be infinite though. It could be procedural e.g. a rough surface could be given infinite detail by using a pseudo random algorithm.
It's trivial to get 'infinite' detail when the data is repetitive. The way they claim it, they should be able to zoom into molecules, atoms and then quarks and so on. Anything else is not really infinite detail in the context of graphics.
They probably can zoom into atoms because there are only so many different types of atoms and there are only so many quarks. So it seems even then their claim holds. On the large (buildings) macro level that might hold as well. Many details in a building, in a city are similar. A window on the left side of a house is the same as windows in the right side of a house. Even trees are similar (hell, they are self-similar, you can use a fractal to build them). Textures are often similar and repetitive.
Yeah there is this intermediate level of detail between the molecules and whole buildings (like surface imprefections, dirt) that might not be as repetitive. On the whole however I don't think their marketing claim is that fraudulent.
