One of the hidden gems of E3 was the demo of Unreal Engine 3. Unreal is a series of first person shooters that have beautiful graphics but not particularly subtle gameplay. They license their engine to other companies that make interesting games.
Sorry for the blurry picture above, but hopefully it gives you a sense of the lighting. They have some crazy normal mapping going on with the monster, then a dynamic lighting model that includes occlusion and transluceny. Result? Stained glass zombie, in real time.

If you're into this sort of technology make a point of seeing the video. It's a 160 meg download.

Thanks to Ryan for pointing this out
  2004-05-30 21:14 Z