I like how RAGE (Game) looks, but it isn't out, so we don't exactly know if it works well, and it is a first party engine developed by the makers of the game. This makes it unlikely to be available to anyone else.
Well, as I said, since id is now owned by Zenimax, it is essentially the same company as Bethesda now. The Bethesda Blog now even updates with id information. I can't imagine Bethesda Softworks would be prevented from using the RAGE engine if they wanted to. You are right though, we don't really know how well it will look and run, on console or PC.
Gamebryo does look like it does upgrade well, but Source has been getting better all the time. I also think it would be neat to see the Frostbite engine, but that would likely never happen. Graphically the Frostbite engine has made one of the best looking set of outdoor scenery on a console I have ever seen; Battlefield: Bad Company, but it may not be able to handle larger areas than that.
Battlefield BC did look pretty good on Xbox, and had large open areas... another engine would be the new Techland engine, used for Call of Juarez: Bound in Blood, which I have said elsewhere is probably the best looking Xbox 360 game I have ever seen, Gears of War and such included... it just looks stunning, and has massive open world enviornments in certain levels, with even sidequests and such. Also, let's not forget Crytek has ported over Cryengine 2 to consoles, called it Cryengine 3, and might be geting some interest.
I just don't see Bethesda switching from Gamebryo for any of these though... the benefits to them do not outweigh the risks and extra dev time, whereas the free engine from id might.
Rockstar's RAGE (Rockstar Advanced Game Engine), in combination with Bullet open source, and Euphoria created GTA4, witch has one of the best large world:Animation quality ratio, but it's proprietary to Rockstar, well, RAGE is. If they could find some way to intergrate Euphoria with Gamebryo, there might be hope for the OPs complaint about animations. Euphoria doesn't use standard Ragdolls, and produces non-set animations, making them feel more realistic.
It's a stunning technical piece of work, no doubt... the complainers on PC about performance really have no idea what all that engine is pushing on a consistent basis. Still, on consoles they burdened that svcker down with so many processing and blurring effects it makes my eyes bleed... drives me nuts. I look forward to seeing what they do with Red Dead Redemption though, which is said to be an open-world game like GTA but set in the west... the original Red Dead was more of an arcade shooter.
Also, Voilition's engine for Red Faction Guerilla is really impressive on console... tons of physics, everything is destructible, and it runs at a steady clip in true 720p with AA and AF and looking really sweet. That game looks better than GTA4 in my opinion, since it lacks the insane blur and such... the physics on people are not as good though, naturally.
There is always a trade-off.