There's a game engine called the Reality Engine that's claiming to be the latest and greatest. From what I've read it sounds like the engine is taking on a lot of new features that are very next-gen, really does look very cool.
I'm not sure whether its going to take Unreal's position though. Unreal, if you don't know much about it, is one of the dreams engines one can only hope to use or work on. It provides most next-gen features before other engines and does it all using a virtual machine (similar to Java's VM) for platform independence.
Time will tell when we see games released using the two engines :), but that will be a little while, 2006.
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