PS3 Land: I've heard that FaceFX is a feature in Unreal Engine 3, correct? How is it being used in the engine? Is it a plug-in?

FaceFX: Yes, FaceFX is included in Unreal Engine 3. The FaceFX SDK is compiled into the engine and is running in-game. FaceFX Studio is used from inside UnrealEd and uses an Unreal Engine 3 viewport. FaceFX is completely integrated with the engine: the artists have access to Unreal’s awesome material system to do things like animated normal mapped wrinkles, and FaceFX can be used from various Unreal systems like Unreal Script, Kismet, and Matinee. In Unreal Engine 3, FaceFX can drive bones, morph targets, and normal mapped wrinkles all simultaneously in real-time so you can get some very good looking facial animation without much effort.