Tech guys...

I have a question for you guys:
How interactive can the enviorment be?
I mean, can an engine support the abbility to grab ANYTHING from let's say the ground and use it as a weapon? or make your way thru a wall blowing it?

That would make a game totally cooler... don't you think?

I'm not technically a tech, but I think i can answer this. It is possible to program an engine that allows everything in the environment to possibly be picked up, but that is more a function of creating every non-background item as a weapon type, and not as just part of the level. At this point it would seem most likely that separate models would have to be made for every item as it is being held as a weapon because of the general lack of polygons and detail when you see a weapon lying around as opposed to holding it (hence, it would be easier to do in a 3rd person setting). Hopefully this will change as games become more capable of handling higher polygon levels in items onscreen (leading to the same model being used for distance and in-hand situations), though I doubt this will happen any time soon (more poly's just means more detailed weapons close up, not necesarrily a merging of weapon models). Another obsticle is the animation of each item/weapon. With the possibility of hundreds of items you could use as weapons, it is ridiculous at this point to make an animation for each one, so they would have to be catagorized with a certain animation to each catagory. It would take a little effort, but it could be done.

As for destructible walls, get the Red Faction demo. It is really fun to blow holes in walls, and tunnel around using explosives, but it creates a decent number of extra on-screen polygons. For that reason, the levels in Red Faction were not incredibly detailed. The levels in Doom 3, however, seem to be much more intricate. Opening a hole in a wall (and effectively doubling the onscreen polygon count) will make a much bigger perfromance hit than most people would be willing to deal with. I think the GeoMod technology is great... but I don't think most developers are willing to sacrifce detail for it just yet.

EllipsusD is right, basically every engine can do this as long as they code the weapon "status" behavior. Blade of Darkness has this, so does Wolfenstein's single player as far as I know.

You WILL be able to blow shit up (including walls), but only if the level designer(s) specifically made it destructible. Like John Carmack himself said at Quakecon, Geo-Mod stuff is an interesting technology, but in a really detailed environment like Doom 3's levels, it just wouldn't work properly.