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"I would donate plenty of money to anyone who picks a sane tookit to develop a 3D MMORPG that *encourages* development (no python, no boost, no java, plain autotools, C, no c++, SDL+GL, gtk+, no wx). Bring it on."

Nebula is a good basis for a game.

The Nebula Device
Its license is as permissive as the MIT license.
Its not an engine per se; its a framework for programming your own engine. But that is what most things billed as "3D Engines" actually are.
There is also Nevrax/Nel technology, which shipped in The Saga of Ryzom MMORPG. The software license is GPL, and it is a competitive cross-platform engine, much like Nebula- however, like Nebula, it is much more of a toolkit, though to a lesser extent.
There are a variety of $100 RAD game tools out there, and it seems like they have always hovered at this price point- you get what you pay for; undocumented, buggy code that is ok for a quick prototype but unviable in the long run.
Excepting Torque. This is an excellent engine for $100 US. The engine shipped in Tribes and Tribes 2, is cross platform, and has a mature toolchain for developing anything that is Tribes-like (predominantly outdoor terrain with buildings and tunnels in it). In fact, if what your developing is basically a Tribes 2 total conversion, the only code you would need to write would be AI and other game-specific code.

The Nebula Device
Its license is as permissive as the MIT license.
Its not an engine per se; its a framework for programming your own engine. But that is what most things billed as "3D Engines" actually are.
There is also Nevrax/Nel technology, which shipped in The Saga of Ryzom MMORPG. The software license is GPL, and it is a competitive cross-platform engine, much like Nebula- however, like Nebula, it is much more of a toolkit, though to a lesser extent.
There are a variety of $100 RAD game tools out there, and it seems like they have always hovered at this price point- you get what you pay for; undocumented, buggy code that is ok for a quick prototype but unviable in the long run.
Excepting Torque. This is an excellent engine for $100 US. The engine shipped in Tribes and Tribes 2, is cross platform, and has a mature toolchain for developing anything that is Tribes-like (predominantly outdoor terrain with buildings and tunnels in it). In fact, if what your developing is basically a Tribes 2 total conversion, the only code you would need to write would be AI and other game-specific code.

Adam is right in assuming that on a per-game basis there are difficulties, but he makes several mistakes thinking they impede a future for OSGames. The Open Source model has advantaged many game development teams on the level that they aren't forced to reinvent the brick, they can use code written by someone else under a flexible license. Examples of this are really boring things like a sound manager, communications layer or texture processing tools. Tons of open libraries are used already in commercial projects for this reason: OpenGL, Python, Ruby, SDL, DevIL, OpenAL, Java to name a few. To what level of open source development is he talking about here? Secondly, whether or not they release the code for open development during the development cycle is their business, and in many cases is unwise given the possible loss of focus on s specific development project. Why would you want 500 people working on extending an engine while you were trying to make a Second Person Fish Throwing Game? You wouldn't. Instead Adam assumes that opensouce development always implies community development during the game production cycle:

"Doom 3 was quite playable half way through its development cycle. That means with two years of full-time development left, in an open source world, players would already be playing it. Two years is a long time in the gaming world. It would be very hard to keep any sort of public interest alive with weekly test releases where the only change might be that a weapon was tweaked, a room was added halfway through the game, the lighting was adjusted, or load time was slightly reduced.

I don't know why he doesn't see the alternative option of releasing the source after the game has been released, to be further developed later. This is a way of retaining control of the project, it's obligations to the inaugural release date and to the publishers. On a commercial level, what is the engine really worth? How much money can a game developer make on licensing out an engine they have made? ID software and Epic Games might be licensing their source out to developers with some success, but really no one else is (though many are trying). Looking at the list of takers for ID's Quake3 engine, few can afford, or justify, a $US450,000 ticket on the code. It is simply out of the reach for almost everyone, and those that can afford it would often rather bring their pie to the table. For this reason, Open Source game development is integral to the future of independent gaming, small teams with innovative ideas can actually afford to make a game without having to work with expensive proprietary code already rigged up for making a certain kind of game. However even large companies like Activision are recognising real advantages in releasing the source of their engine *after* the development cycle, in the interest of a community of developers freely extending the development of the engine after the market life of the project for use by the originators, or anyone else later.

"On 28 October 2003, Activision released the source code for Call to Power II. This part of our CtP2 section is dedicated to the CtP2 Source Code Project: the collective effort by the Apolyton CtP2 community to document and improve the source code of the game."

Anyway, it is really a question of critical mass in the source pool. With enough free source available (including libraries, API's and whole engine projects) to make nearly any kind of game, as is happening right now, small to medium teams can quickly develop a specific project with the primary budget being dedicated to human labour, not licenses and legatilities.

Companies like Radon Labs have really cottoned onto ths, and looking at the commercial games derived from their own Nebula Open Source game development is really working, and working commercially for the developers. Aside from the to

There's also the free Nebula Device released under essentially a BSD-style license. It's created by Radon Labs in Germany. Their site appears to be down right now, so here's a link to the archived version. Check out the screenshots for their upcoming Schwarzenberg game. Looks like a nice engine.

• OGRE - Seems to be an engine "done right". Learning curve is high, but it is pretty. Not dorked around with it much to comment on usefulness.
  
• Crystal Space - The "linux" of 3d engines. Does damn near everything but it's documented horribly and structure seems nonexistant at times. Will run on almost anything with a CPU though.
  
• Nebula Device - Very very pretty, easy to get started in (not sure how easy to complete a project though), skimpy on docs as well but what does exist will have you pushing polygons quickly.
  

Demeter Terrain Rendering Engine
Crystal Space: A Free 3D Engine
Object Oriented Graphics Rendering Engine
The Nebula Device
The NeoEngine
+5 Informative ;)

Simply bold wrong,

With GLP, you just need to open your source code of your game, but can sell what make your game what it is (texture, models, maps, scripted parts...). See Id Software with is Quake source, they say, "OK, my source is GLP, but if you whant play Quake from theses sources you need to buy the CD for the ressources who are not GPL...". An other example is Radeon Labs, who create a new game called Nomads based on The Nebula Device Game Engine who is open source.

And just one thing don't use NetImmerse ! I am a Dark Age of Camelot addict player, and I can't play more than 3 hour in a row due to memory leaks. Actually I quit the game every 2 hours to get back some fluidity in the 3D Engine...

And it works in linux too.

The more Linux engines, the better. Another one to check out is the Nebula Device which is free in both senses of the word (distributed under the Tcl license).