Ok. Explanation time:

General Purpose computing:  game code is a mixture of integer, floating-point, and vector math, with lots of branches and random memory accesses, code like this is best handled by a general purpose CPU with a cache, branch predictor, and vector unit.

Single Algorithm: DSP's ( Or SPE's as Sony calls them ) have no cache, no direct access to memory, no branch predictor, and a different instruction set from the PS3's main CPU. They are not designed for or efficient at general purpose computing because they rely on instructions.

Now dont tell me you read at face value what a developer states from their own creation. Promoting ones product springs to mind?

How about we look at the facts. Fact is we know that Bioshock, Mass Effect and Gears of War all run 100% full settings and above 40FPS on a single core ( with only 1 thread ) PC absolutely perfectly. No missing textures, no missing lighting effects etc etc. What are the benefits of running these games on a Quad core for instance. Frame Rate running 70-100FPS? Purely due to the fact that each core now has MUCH less to deal with. But loads of extra room to get do so much more.

It's a simple method of workload. Lets say UE3 is fully designed to take great advantage of running 4 threads. Any game designed specifically to stretch these 4 threads to the edge will ABSOLUTELY not run on a single core processor. IT's not possible. And if it is it would have to be at such a low setting that the game would look vastly different from what the engine is capable of.

I use Alan Wake as an example against current 360/PC games using UE3 because the developers have designed the engine in such a way it will physically not be able to run on my computer ( which casually runs UE3 games ) with ease.

If I gave you 20 books to carry on your own, you may be able to handle that. Lets say you can carry them at 10 miles an hour. We will call this respectable speed and more than enough to please us. But then I gave to you 3 friends. Now between you dividing out the books you can all carry them at 20 miles an hour, which we will call pathetically easy. Now there is 4 of you we could add more books to the equation, but that would then decrease your speed to get through the workload. However as long as we added books to the 4 of you and kept your speed around 10 miles an hour we are in a great position. Because we can quadruple your workload and get the same pace as what only one can do.

Books = Information. People = Threads. Speed = representative of how smooth the program will still operate ( like FPS ).

So even going by your theory that UE3 is designed with multithreading inline, that would mean the developers of Mass Effect, Gears Of War and Bioshock all either absolutely suck; or conciously decided not to take advantage of that. Maybe due to excesive development time? Who knows.

My point remains we haven't seen the 360 stretch it's graphical legs fully yet. Theres plenty more in the bag. Justhe same way people say about the PS3 needing different approach to utilise it's threads and optimized to specifically run the engine that way, the same is needed for devs to do on 360. It has 6 threads. All can access memory when the need to, all do not need an instruction from another CPU. Unlike the PS3 Threads. Until games fully optimize the engine for these 6 General purpose computing threads, then we will be stuck with Gears 2 quality on 360. But as I pointed out Alan Wake will show us where the 360 graphics are heading on what is capable. Using 3 threads on a quad core Intel back in 2007 I would estimate it would probably be maxing 4 or 5 of the 360 threads, but even then these developers may be able to get more from the same amount of threads due to better coding in their next game for instance.

Hopefully this post is understandable.

That's kind of depressing.  Maybe they'll split the versions a bit to give the 360 one a little better treatment if possible.  Why let the 360 version be held back by the PS3?

@Selnor
Sorry, but your post once again trails into speculation and faulty technicalities. As for the latter it would be useless to go in detail over compilation and branch prediction on the SPEs, their DMA access and local memory, why 3 cores with 2x SMT is not the same as 6 cores and so on. Let me focus on the former:

"Now dont tell me you read at face value what a developer states from their own creation. Promoting ones product springs to mind?"
You're basically accusing the UE3 developers of lying about how they split the workload into threads? Seriously?
That's not really smart because 1) the way the threading of the engine works is not a black-box secret, it is documented to any developer who licenses and uses the engine 2) any user could simply run a thread inspector on a PC running the UE3 engine and see by themselves the structure of the processes and threads.
Maybe you should read again what you wrote there and admit that it applies to Remedy's still unreleased code more than to UE3, that has been around for a while now.

Your wishful thinking seems to be that Gears and other UE3-based games "only used 1 thread, but there's 6 of them so the vast majority of the potential is still untapped". Well, sorry to burst your bubble but it isn't so. There's 3 cores, each with 2x SMT, and I am no 360 developer but I would not be surprised if one of those hardware threads was reserved for OS background services (messages, chat, OS interface, background music).
In those 3 cores you want to run three heavy threads separately to avoid L1 cache contention (and same with the FPU maybe) and they will probably be game main loop/rendering/physics. Another helper thread could likely be used to stream data from the disc and decompress it, and I very much hope that Alan Wake's engine does a better job at that than UE3, that is plagued with texture pop-ins.

The way UE3 did it was to have 2 heavy threads (gameplay / rendering) and several smaller threads (physics / shadows / animations / data streaming  / ...). Alan Wake's engine might put more stress on the physics/data streaming, but once again it's a quantitative difference, not a qualitative one.

Your line of reasoning seems to be: UE3 runs well on single core PCs. Remedy stated that Alan Wake will have multiple core requirements, and it will come to 360 thus it means that it will sweep the floor with Gears. You made a number of leaps of faith there, including the fact that requiring multiple cores - instead of being able to scale down - translates into incredibly better results, and the fact that the 360 version will be up to par with the PC version.

There will be games on the 360 that will technically surpass the likes of Gears for sure, but it's not like there's a magic "multithreading" labeled switch that developers have left off and that will unleash untold powers when turned on. They had an easier time on the 360 rather than on the PS3 into implementing multithreading in a PC-like manner, but further evolutionary improvements will require smart optimizations and fine tuning of solutions that are very well known and have been in use in the industry for years now. This not at all alike to the situation on the PS3 where the 7 available SPEs have to be coded for in a radically different manner than your usual x86/PowerPC CPU.

The "multithreading revolution" you're waiting for happened yet, probably back in 2006 between the first and second generation of 360 games. It's now time for evolution, and I'm sure it will bear great fruits.

This thread needs some MikeB make believe.

really?  heavy rain was multi plat?  I never herd that before.  Was this before sony picked it up to publish?

It was in the very begining, we are talking drawing board phase. In fact the game had 1 tech demo at the time. After that there was only ever a PS3 version. So no work actually started on a 360 version. That was 2006.

It's not specualtion. I even mention that if UE3 is fully designed for multithreading then the developers are not optimizing for this at all. I bought my PC in 2006. It was not the highest spec of it's time by any means. I'm running a Pentium 4 3.2 ghz CPU, 1.5gb ram and an 8800gtx as I said. Now I know for a fact my PC is nowhere near the capabilities of the 360. Yet I can run Gears of War just as good as the 360 version fine.

It's simple workload mathematics. Your confusing an issue that doesnt need confusing. By all means they may be running Gears on multithreads on the 360 compared to my single thread PC. But that does not mean in any way that they are anywhere near maximising that potential. This is my point. Considering what your saying about Alan Wake, I have no reason to think different. All games that have run on PC and 360 have all looked basically the same to me. Albeit the PC does a higher res on a monitor. Run a game like Assasins Creed, Gears Of war on PC through a 42" HDTV with 1080p and you will see more flaws in the PC version than on a fogiving 20" monitor. I appreciate PC's are the best game machine, and purpose built games that stretch the full capabilities of SLI tech as well are amazing ( looks at Crysis ). Gears 2 is impressive on 360 dont get me wrong, but visually what Ive seen from Lost Planet 2 for instance blows it away. The 360 is gonna surprise everyone in graphics this E3, we will without a doubt see Alan Wake, Forza 3, Splinter Cell and Ive a funny feeling Perfect Dark 2 ( considering that Perfect Dark is getting ready for a XBLA release ).

You have still not provided any reason for me to think Gears of War for instance is designed and optimized for multithread. If it was I would not be able to run it on a PC with less gaming power than the 360. I guess we will see at E3.

The new AVP screens look stunning. I believe that is designed for multithread especially. Have a look at the thread. Wow. 

I've linked the interview where Tim Sweeney explains that the multithread optimizations were born on the 360 version and then ported to the PC one. I've linked a powerpoint presentation about the use of UE3 in Gears where they talk about how they multithread. I've suggested you try running a process inspector on your PC to check for yourself.

I think I've provided lots of reasons, but as we say in Italy "there's no worse deaf than who doesn't want to hear" :)

As I said, I'm sure we'll see technically superior games on the 360. If not at this E3, then in the future. But about this "multithreading" obsession of yours you're figuratively putting your fingers in your ears and going "lalalalalalalala..."