I have a friend with a brother who worked for a company using Unreal Engine 3, and appearently it's a major bitch to develop for. Also Epic, the engine's developers, don't provide much support (according to this source, anyway). In terms of sheer tech, though, it really is a major beast! Not much beats playing Gears of War in 1080i with a good set. I think this may have been an exclusive case, since I never hear any other negative feedback from developers.
As for Aliens using it, I can't wait to see what Gearbox comes up with. Just look at what they accomplished with the new Brothers in Arms.