The video is online so I’m sharing:
http://g4tv.com/trailers/hdvideos/37413/Unreal-Engine-3-New-Features-GDC-2009-Trailer.html
As a level designer, I’m most excited about LightMass. Instead of placing thousands of lights per level, we’ll be able to get away with very few. Emissive textures automatically cast light and sunlight bounces around the level realistically.