Total Battlefield 2 has a question and answer session with Lars Gustavsson, lead designer at DiCE. THis is a translation of a swedish article from bf2.se.

Bf2.se: Another popular question from our members is about the new game-engine. Have you been using the Refractor engine from BF:v or is it basically a whole new engine?
Lars: We started to work on the BF2 engine right after the release of BF1942 and it have been going on since then. We only kept some core-parts of the first engine and then written new parts as renders-, physics-, effects- and animation system, plus some other systems. This is giving us opportunities in the game we wouldn?t have been close to use earlier.