I have been wondering if I should do my final project for the MDM as a machinima piece. Not only would this be fun, it would still require heaps of work in Maya, animation of a different sort and give me a suite of skills in real-time that would be extra handy at FBE. I can see scope for effects, definitely Mudbox and handling of scripted cameras and so forth. I am not sure how the character animation will work in the tools, but obviously some very cool stuff is possible...
Creating a trailer like exploration in Crysis of the Elemental's world would be great and if you look at the video below, the quality possible in the CryEngine 3 to come - whew!!
Plus here are some pretty amazing screenshots from Voodoo Extreme's article on the CryEngine 3 features. To think that this quality runs in real-time these days.
[CryEngine 3 screenshots via Voodoo Extreme]