People had been wondering when "Next-Gen" level graphics and physics would come to a PC.. when Epic began showing off their Unreal Engine 3. Unreal Engine 2 is what powers games like "Mass Effect" etc.
This is their first next generation graphics engine. They say the videos as show below are NOT pre-rendered, but rendered through the engine. If so, this may be one of those jumps forward like Doom to Quake. The impact of how the characters look and feel is incredible. They are showing this on a PC running tri-SLI.
Effects broken down:







