The new engine is designed for next gen consoles. This is the UE3, just heavily modified.

It probably uses Tessellation.

Gears of War 2 I think from memory used Tessellation for the Characters, so it wouldn't surprise me if they push it another step farther.

However, I highly doubt those will be actuall what-we-see in game graphics.
The textures, anti-aliasing and shadows are to "perfect" if you know what I mean, they may have just touched it up afterwards to make it look better.

Regardless, from an artistic stand-point the game looks fantastic, can't wait to play it. :)

Well then my god, Epic is a new kind of awesome, they told people it could do fancy things. Kinda explains why they keep winning the best engine award :)

cheers, kinda makes epic look even more awesome from that stand point then. They reallly do know their engine and what it can do. They kinda love the 360 and pushing it don't they haha. 

Looking a lot better than when first shown. They are polishing pretty well but of course they could still make it even more pretty!

EDIT: Seece man, i'm totally trolling the 360 right now. Did you see it?

Wow that looks absolutely fantastic!

it does look good. once this games comes i am going to renew my live

This may sound a little unusual, but the thing that these pictures make me wonder the most is what developers could do with high end PC hardware today if they were pushing it ... After all, the XBox 360 is a 5 year old system and far below the performance of new graphics cards, and yet there are some pretty impressive games still being produced for it.

Indeed...according to some, Metro 2033 in 3D on max settings looks phenomenal.

Looks Really really Good.