Wow, what an exciting time for real-time 3D enthusiasts!
Epic released the UDK for PC: the Unreal Development Kit based on the famous Unreal 3 Engine! For non-commercial/Edu use it's totally free. And for commercial use there is a very reasonable and transparent pricing:
- Internal Use: 2.500 US $ per developer seat per year
- Publishing: 25% royalties for revenues above 5000 US $
- Internal Use may stack with publishing thus: per seat per year plus royalties
You can read it directly on their site. Checkout the features, here some highlights:
- SpeedTree included - with editor
- global illumination solver
- Bink Video Codec
- Animation is driven by an AnimTree
- animated Facial normal maps using a visual scripting system
- slicing of objects for physics-based destructions
- distributed assets processing
- automated creation of navigation meshes for pathfinding
- visual shader creation system
- and much more of the "usual" Unreal Engine stuff
Another YAY 
One important note though: this is basically the modding access. No source code access. So this may mean that if you can't script what you need, you won't be able to implement it.
