Hey btw people if you want to see what real "next-gen" animations are supposed to be like (the kind of stuff Square, Level 5, and maybe Naughty Dog if what they showed is true, is based on).
This is the version for CG production, but they made another product (Euphoria) for game development.
WATCH THE VIDEOS BIZNATCHES!
http://www.naturalmotion.com/endorphin.htm
EDIT: For those who don't get it it basically blends AI, Physics, and hand-made animations (or mocaped too, but it's not really needed), to make very realistic context-influenced animations.
For example, a football tackle will NEVER be exactly the same, it is entirely based on the the info passed to the AI. For example, if the player attempts a tackle from very close to his opponent the animation will adapt compared to a tackle initiated from further away as the AI attempts to adjust his position to remain in balance while targeting the "weakspot" of his opponent, lowering himself properly to execute a realistic tackle. No canned-like animations.
EDIT2: Another example I like to use is a bit more code-oriented. Basically, let's say a Gears of War-like game. You haven't been in combat for a minute, so the animations turn to their relaxed versions. You get shot at, bullets flying by, and suddenly the reload and movement animations change with more emphasis on stress and tension. When the character runs he tries to keep his arms more stiff, bends forward a bit, to have a steadier aim (less wobbling while running). After the "tension" level lowers once no more bullets are detected flying by the character, he will enter "nervous" state. He will be looking around more often, heavier breather, reposition his hands on his gun once in a while as his hands become more sweaty, etc.
Pretty cool stuff