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No, CryEngine is the brand name. The version you are thinking of was version 1.0. The current version of the free SDK is 3.5.8, which you can download from http://www.crydev.net/ It's only a week old. The version they will be demoing at the Game Developer's Conference is even newer, with Linux support and physically based shaders. It will probably be labeled version 3.6 or 4.0 because those are big additions.

Note the SDK is much bigger than the game engine. The game engine is the set of DLL's that get called by your compiled game executable, and take care of rendering, networking, and other functions that are common to most games. Games additionally have content (maps, textures, animations, etc.). The software development kit also includes the "Sandbox" editor, which is how you build game levels, a bunch of specialized tools for importing and creating content, and usually a sample game level and other assets.

CryEngine 3 does do water interaction:

"User interaction with surface will generate waves propagation" from http://freesdk.crydev.net/display/SDKDOC2/Water+Shader

And surface type collisions (like object falls into water) generate a particle effect according to a spreadsheet. Water is already set up as a standard collision type, but you can make custom ones.

Also boolean destructibles (damage subracts from the object shape):

http://freesdk.crydev.net/display/SDKDOC3/Boolean+Destructibles

Of course, just because the features are in the game engine does not mean they actually get used come game development time. There is a limit to how much time they can spend making one game, so that limits what goes into it.

CryEngine 3 does do water interaction:

"User interaction with surface will generate waves propagation" from http://freesdk.crydev.net/display/SDKDOC2/Water+Shader

And surface type collisions (like object falls into water) generate a particle effect according to a spreadsheet. Water is already set up as a standard collision type, but you can make custom ones.

Also boolean destructibles (damage subracts from the object shape):

http://freesdk.crydev.net/display/SDKDOC3/Boolean+Destructibles

Of course, just because the features are in the game engine does not mean they actually get used come game development time. There is a limit to how much time they can spend making one game, so that limits what goes into it.

Actually, if the game is of no value to Sony any more, they should sell the rights to someone who wants to keep running the game servers, even if that's players who just want to keep playing. In that sense, Crytek offering Community Dedicated Servers ( http://www.crydev.net/dm_eds/download_detail.php?id=5 ) makes their game worth more, since people can keep playing as long as someone wants to host the server.

Crysis is made by Crytek, and distributed by EA games, not Ubisoft. Also, Crytek distributes their game engine as part of an SDK for free, so you can mod their games or create your own from scratch: http://www.crydev.net/

If you add up the downloads for the two versions at http://www.crydev.net/faq.php there have been 1.06 million legal downloads of the free software development kit that lets you mod the Crysis 2 game, create new levels, or even entire games from scratch, and then sell them. So while it may have been the most pirated, at the same time it may be the most free and legal downloads too. I don't have numbers for other game engine SDKs, so I can't say for sure if it's the most downloaded, but a million is sure a lot of them.