I'm all for a new engine as long as it's not at the expense of gameplay. The Oblivion engine would be my first choice for many reasons in no particular order
*It comes with a toolset!!(w00t)
*It comes with a toolset!!! (w00t)
*Radiant A.I.
*It is from what I've read on the Elderscrolls forum (from one of the developers can't remember who though) midrange friendly- they have Oblivion running on an ATI 9800 or something similiar
*Uses Havok physics IIRC
*Looks gorgeous
There are bad points of course
*Beth are either rather reluctant to let anybody else use their engines or just won't consider it at all
*The skills system (which they are still using to the best of my knowledge) isn't exactly d20 compatible but the developers may be able to work around that
*Umm can't think of anything else, except maybe the cost of licensing the engine
Well that's my 2 pence, feel free to shoot me down or not as the case may be.