As the rendering backend the OGRE 3D Open Source Graphic engine is currently being implemented. Discussion and advances are posted in this forum thread.

What Will Change With OGRE?

For Artists

Vertex and Fragment Programs (Shaders): both low-level programs written in assembler, and high-level programs written in Cg, DirectX9 HLSL, or GLSL and provides automatic support for many commonly bound constant parameters like worldview matrices, light state information, object space eye position etc.; A stock of pre-defined materials and shaders will be available to help the artistic process: designing portable materials (ones that will render propperly on older hardware) is not an easy task... but you will be able to define your own if you need to.

Textures: support for PNG, JPEG, TGA, BMP or DDS files, including unusual formats like 1D textures, volumetric textures, cubemaps and compressed textures (DXT/S3TC). Textures can be provided and updated in realtime by plugins, for example a video feed.

Meshes

Export from many modelling tools including Milkshape3D, 3D Studio Max, Maya, Blender and Wings3D
Skeletal animation, including blending of multiple animations, variable bone weight skinning, and hardware-accelerated skinning
Biquadric Bezier patches for curved surfaces
Progressive meshes (LOD)

Special Effects

Particle Systems, including easily extensible emitters, affectors and renderers (customisable through plugins). Systems can be defined in text scripts for easy tweaking. Automatic use of particle pooling for maximum performance
Support for skyboxes, skyplanes and skydomes

Misc features

FIXME