Guys, it's not really the engine that makes it look so good. It's the original source-art. Doom 3's Source art (the stuff that was really high poly then turned into normal and displacement maps) was 50-90Million polys. The Unreal 3 source-art was 250Million+ polys. The engine itself is only marginally more powerful graphically then DOOM3's in terms of per pixel lighting, DOOM3 was only marginally more powerful (and certainly better coded) than CryEngine. Where Unreal3 technology really shines is in its clever use of other far more interesting (and often completely missed by noobs) features such as hierarchical object management (in thier demo a fridge, with shelves and door and that understand how to remain and work as a fridge would in terms of physical relationships - ie the door opens and closes and the shelves and draws don't pass through one another nor matter how the object is manipulated), projected lightsourcing and really nicely faked radiosity.
Don't get me wrong it does represent yet another evolutionary step, just not in the same way as DOOM3 and Far Cry did. What we really need is real time ray tracing and radiosity. Then all of these faked features could be dropped in place of real light sourced reflection and refraction. It's not that far away really - less than 5 years. I've forgotten what it was called, but some company in the US has already made a 90Mhz "Ray Tracing Accelerator" processor which could end up (in a faster form) on Graphics cards soon. I hope.