Just tried the demo Epic Citadel that is Unreal 3 engine adapted to Ihpone on my Itouch 4 (3GS) !
Just amazing the quality the engine can bring on last Iphones !
Ok it had no characters, but big and detailled level with rocks, trees, castel, water cascade, animated trees, ambiant sounds ...
all smooth, with precise lightmaps that have some simuled HDR effects on some bright parts exposed to sun !

















But i think the cost to use it must not be cheap !
Well let's wait for some games made with this engine , it would be next level if 3D artist bring such good models and precise textures !