UDK is the complete Unreal Engine 3 as it is used by the big companies out there. The only difference is that you don't have access to the core-code... Not that you need the access though since the unreal script can be manipulated by using simple mutattors.
So what's the deal? Money... Indie developers can be the best advertisement. We already experianced that with several games including TES-IV. Epic just moved a step forward by giving you a game engine.
To make the engine your proprty and have the rights to remove their logo like Bioware did for Mass Effect 2 for example... then yes... That's gon'a cost you a million dollars. But with their logo up... They become more popular and you have one of the best game engines available in the market. Not to mention that many of us bought games that use UE3 only to see what this babe can do. And considering the 25% fee for a 99USD license or the 2500USD per year? Not bad. More fame for Unreal Tech more money to Epic games.
Well the guys in Epic games do even worst use of the specular channel than Beth did lol
Anyway, the shaders can be created on the fly through the Material editor in UDK so, I do the most of level design stuff myself plus a large part of the architecture and enviromental design at least atm. Besides, it might take more time but, the less people you have and the more skilled those few are, the less is the chance of a failure because some of them may not share the same passion for a project as some others do. I had to learn that the hard way in my real job. I'd prefer to see a good and short game rather than a streched boring one.
The screenshot is actually a very poor example of what can be done in UE3 since we're still working on basic stuff like gameplay. But once I get the first level done and running I'll update the post.
Feedback is always wellcome since when someone works on a specific theme for days he tents to be unable to see the difference between the forest and the trees :0)
And again, please excuse my english, I'm not a native english speaker.