sloganvirst: Yeah, I found ioQuake3, is that what you were talking about? And also, is it possible to use it for a SP game too, or CoOp?
jefequeso: If you've found the right thing, I believe it should be possible to use for any sort of game.
A game engine is usually just the graphical component of a videogame (although sometimes things like physics simulation and sound are added in). Most will come with a development kit, although I'm not sure if Idtech3 does or not.
Dumb question: Have you looked into Source at all? It comes with its own development kit including facial animation software and modeling programs. And it was specifically designed to run on lower-end hardware.
EDIT: I should be really clear. I've never actually used any of these myself. Whatever knowledge I have comes strictly from my interest in game engines, not from actual experience.
Ok, I will try it out then. :-)
I kinda stayed away from Source because I thought it needed very powerful machine to run! I can play Portal on this laptop, but it is kinda laggy, so I thought it would not work very well... but I will try it out though...
EDIT: What I really want is something multi-platform, that supports Windows, Mac OSX, Linux, and Xbox 360, and you can test your pojects on Xbox 360 without having to sign up for one of those annoying licences or something...