Unreal Engines are very good for modding. I can find my way around the map editor and I'm not a mapper at all. From a coding point of view you get a lot of freedom and it's not too difficult to turn it into a completely different game. UE2 is getting on a bit now, it's no where near other engines in graphical quality now. If UE3 is as easy to mod (by the sounds of it, it will be easier because it has a visual scripting system which allows level designers to dictate some gameplay without needing to code) it will be the best of both worlds. Source is also easy to mod although I hear the coding is not quite as easy as Unreal, but it obviously gives a lot of freedom because of the mods we've seen come out of it.