Well, the fact that you're actually controlling the characters doing the killings in the most gruesome and realistic of ways, rather than just watching others do it. I think its AO rating in the US is completely warranted. It is really one scary, fucked up game. I do believe that if a child gets his hands on it, it could disturb him for many years. Hell, some things about Manhunt disturb me, and I only played it for a few hours. I would have been 17 or whatever playing it, and kept grinning as I was murdering people with plastic bags, and slitting their throats and watching them bleed to death with glass shards.
Banning it is a bit extreme, but the ban is likely to be due to the fact that kids will go out and play it, despite whatever rating they would have given it.
Overall, I agree with the US rating of AO