I saw over at Slashdot Games who saw over at Fragging for Fun Clan that Epic is slated to release a free version of the Unreal engine with no content or source code for non-commercial and educational use. Epic is doing this mainly so that people can begin to use the Unreal engine for non-gaming purposes, though it's unclear whether or not gamers can still use it. There will be no content whatsoever so anything you do will be from scratch. It's strictly on Windows for now but will be ported to Linux and Mac if there's demand for it. The download will be pretty small at around 20MB. People who want to use this stripped down version without support or source code for commercial purposes can license the engine for "considerably less than the US$350,000+ we charge for (a) game"
It's a pretty smart move on Epic's part, you get more people familiar with your engine and tools while opening up a new market for licensing the Unreal engine for non-gaming use. You can't make a MOD and distribute it with this since MODs usually rely on Epic code in UT2k3, so it's a win-win situation.