I'd personally recommend Source. It has a lot of great editing tools, as well as compatability with free 3D editors like SoftImage Mod Tool. I'm rather big on scripted sequences, and in that regard, Source is pretty much King. (Face Poser is freaking awesome)
I'd say use Unreal...I really don't know engines too well, but I know that Unreal has loads and loads of documentation, and doesn't require too much programming beyond UT Script (which apparently, is fairly easy to learn. Plus, UT3 is pretty easy to get ur hands on (just buy it)