No! I spotted a flaw in the engine - the smoke from the explosion doesn't cast a shadow! (only the debris) hehehe Honestly though, I hear nothing but the highest of praises for Unreal Engine 3. I wouldn't doubt it in the least that the engine is capable of shadowing like that.
last little one to remove any doubt you could have : a video that shows the differences between the old brother in arms and the new one http://www.gametrailers.com/player.php?type=wmv&id=10395 I'm not bashing, but they'd better stop the BS...plus the ingame video looks very good to me, they did a nice use of the unreal…
the last shot comes from the shots and videos ubisoft released a few weeks ago, as final quality screenshots, the source site I'm referencing from (nofrag.com - french site, like firingsquad.com) wanted to show the difference between what ubi is announcing and will use for promoting and the game like it is now. as I said…