Unreal 3 has been responsible for quite a few games on many platforms already. Ever heard of Gears of War?
That being said, one of the features flaunted in the tech demos was the scalability of the engine, being flexible enough to create complex interiors and expansive exteriors as well. It's a heavily shader-intensive engine, lots of blurring, shimmering and cinematic effects.
If you want to create an entire city to drive around in then your best bet would be an engine geared more toward realism and less stylisation, unless this is an explicit requirement.
Also, U3 is expensive, dude. Licensing fees for current-gen engines can bankrupt individuals.
Whatever you choose though, good luck
