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Unity Technologies , the creator of Unity 3D has made the Basic version of their 3D engine ; Unity- oriented towards game development, free for personal and professional use. The only drawback being the Unity splash screen that pops up on your published content.

The comparison chart for product features can be found here .

A full fledged game developed in Unity complete with source code. Asset and tutorials can be found here.

Following are the features available in the free version:

• Integrated Editor - supports javascript ,c # and  boo.
• Support for shaders ( custom and prebuilt )
• Physics Engine from Nvidia - Ageia PhysX
• Publish games to the Web and as a standalone application for both MAC and Windows platforms.
• And More

The free version does not include advanced features like Render to Texture , Dynamic shadow etc.. More here.

Last but not the least, there is this clause ( not sure it would ever hinder you if you are a one man army :) )

Companies or incorporated entities that had a turnover in excess of USD 100,000 in their last fiscal year must use Unity Pro

A company, incorporated entity, or individual may not use both Unity and Unity Pro. So a team can't mix those two licenses.

Its free for download and worth giving a try if you are new to game programming and have big time dreams of writing games for the iphone or consoles like Nintendo Wii ( publishing to these requires you to part away with some of your cash, anywhere between $400 to $1,500 or more ).

Happy coding !