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Mark Rein was interviewed recently by the Guardian Unlimited's Keith Stuart.  Among the interesting comments from the interview was this one:

"The game is up and running on Xbox 360 - it has been for a long time, and its running wonderfully - it just doesn't have any Xbox Live written into it yet so that's the work that remains."

This basically confirms the rumor that Unreal Tournament 3 was indeed up and running on the 360 a long time ago.  It really seems like a missed opportunity for them to hold off on releasing the game on the 360 simply because of the user created content issue on Live.  So who do you think will eventually give in on the issue, Epic or Microsoft?