bit-tech.net have an article covering the cinematic qualities of the source engine today, it focuses on Day of Defeat: Source as this is where we are likely to see most of these engine changes first. It's a good read with lot's of screenshots and videos. I was slightly put off by their opening statement;

arguably the best multiplayer World War II shooter around

Hmm, not going to comment other than to say it might be if the netcode worked. I'm glad I read it all in the end however, very informative stuff.