Showing at the ATi booth near the back of West Hall in an unassuming yet Half-Life-themed private theater sporting crowbar door handles, Valve Software's Half-Life 2 undoubtedly created the most buzz at this year's E3. Wherever you went, chances are you overheard somebody talking about the game, and whenever you asked someone about the best games they saw at this year's show, Half-Life 2 was always mentioned in the list.

Since we posted a huge preview of Half-Life 2 just the other day, we won't go into much of the backstory or gameplay in Half-Life 2 in this piece; we'll just focus on what Valve co-founder Gabe Newell showed us at this year's E3. Unfortunately, words just don't do justice to this game, and you should check out the full in-game presentation on video for yourself. But if you're on a slow connection or aren't an IGN Insider, I guess words will just have to do.

Technology Demo

Gabe Newell took us through a Half-Life 2 tech demo first, showing off what the Source engine was capable of. The demo started off with a model of the old G-Man from Half-Life 2, which was soon superimposed with the new model from the sequel. Wow! Talk about a big difference. The skin textures look ultra-realistic -- as if you could reach out and grab the G-Man's cheek and squeeze like an Italian grandma. Gabe showed off a wide range of emotions that the facial animation system can be used for, as the G-Man smiled, scoffed, scowled and boasted as us for the next few seconds.

Much of the talk about Half-Life 2 has surrounded the facial animation system, which is amazing, but what I found most impressive were the eyes. They seem to express so much emotion on their own. If you walk around the room, the characters' eyes follow you. They look moist, reflect light and are self-shadowing, giving an eerily realistic appearance. The lip-synching is also very impressive. It breaks down the sound files into phonemes, and animates the characters' lips accordingly with the correct shape for the sound. Not only was this technology shown in English, but also in Chinese, with believable lip-syncing results for both. Who knew the G-Man could speak Mandarin?

Gabe then left the new character models for the great outdoors, where he showed off the displacement map technology. All surfaces, natural and man-made, have a displacement map. This means that they can be deformed, shaped and altered on the fly. Gabe also promised that the terrain system could support very large areas, and due to a level-of-detail based system, the game should be able to run even on low-end systems.

Next it was time for Gabe to show off the material demo. Valve is going for an extremely realistic physics model in Half-Life 2, and you can expect objects in the game to react just as you would expect them to in real life. In addition, every object in Half-Life 2 has a unique density and realistic physics applied to it, and reacts as such.

Gabe walked in a room with a pool of water in the middle surrounded by various objects like barrels and mattresses. Using the Manipulator gun, Gabe picked up a barrel and chucked it into the pool. Because it is made of metal and heavy, it promptly sank to the bottom of the pool, which refracted light and distorted objects within. He then picked up a mattress, and it flopped around in the air, sagging on the ends. He tossed it into the water, and it splashed in and floated because it was less dense than the liquid.