Methinks you're right.

And it looks good, particularly the way the metal bends and twists... I didn't think much of the concrete shattering, though - it looked like it was pre-scripted to break in a certain way.

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I might as well put it in here, and for comparison I'll link to a Euphoria tech demo.

During the Microsoft GDC Keynote, Epic announced GeoW2, and also some enhancements to Unreal Engine 3. Better lighting, destruction, and materials (in the demo they showed a cube of meat and a sphere of liquid metal. The metal looked good, but the meat was far too... wobbly):

http://uk.xbox360.ign.com/articles/853/853510p1.html (Video near the bottom)
http://uk.xbox360.ign.com/articles/854/854138p1.html (Written analysis)

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And the Euphoria tech demo that was released a couple of years ago:

http://www.gametrailers.com/player/17054.html
http://www.gametrailers.com/player/17055.html

The second video also shows off the character interaction with the environment, controlled completely by the engine. Euphoria was used in the last Madden game, and is used to some degree in the new GTA, but how much I don't know. Some reckon it's only use comes in the drunk-driving scenes.