Mr. Rein of Unreal Games has posted some new changes to the UDK royalty rates that are refreshingly more favorable to the small developer.
Essentially before you were required to pay royalties on any project that made more than five thousand dollars. The new limit has been raised to 50 thousand USD. Mr. Rein has a more verbose version of that plus more information on how they define that first 50k. Jump over to his forum post and where you will even find he has included charts for you to peruse at your leisure. Now that's what I call artist friendly.