For those of you who are interested, and because it's exciting, I thought I'd mention that the Unreal Engine 3 Development Kit is now available for free for anybody to download: UDK - Unreal Development Kit - Epic Games

Yes, the same stuff that powers Gears of War, any of Epics' games and every UE3-branded title there is. Free! This includes all of the ridiculous stuff that comes with that: real-time networking, AI, real-time lighting & shadows, Nvidia-powered PhysX, distributed computing, UnrealScript, destruction tools (so you can created destructible environments,) cinematics, animation, particle effects, bink video codec support, terrains, audio, etc. etc.

You do not get source code, but it's totally free for noncommercial use and the license is fairly agreeable for small development teams, at least up to the point you can get your own source license anyway. Windows only, and the system requirements are pretty intense.

Oh, and since I'm mentioning tools like this, I'll also say that the game development kit Unity3d (which has been used to create quite a few popular commercial games for e.g. iPhone) is now available for free: UNITY: Game Development Tool. The Free version does not have everything that the professional version does (although the full, advanced professional version is priced amazingly well IMO, considering what it comes with, at $1,600.) It can do lots of stuff however, and it works on both OSX and Windows (and you can publish your games to either one, AND you can even put them in a web browser!) It is a lot different from Unreal, one of the big ones is you do lots of Scripting with it through Mono (Main Page - Mono) using C# or Javascript, but if you have the pro version it's possible to drop down into optimized C/C++ etc (which is all you have with Unreal.) Pro also comes with Wii & Iphone publishing capabilities.

I thought the game guys out there might like to know. I think there's a lot of room for both tools to exist, and now that they're free (and/or reasonably priced!) more people can jump in and have fun with what the pros use.