Epic is planning to release a stand-alone free non-commercial version of the Unreal 2003 Engine. In an old unnoticed forum post, Epic's Mark Rein mentions that "the engine will include an Unreal Engine runtime and Epic's Unreal toolset such as UnrealEd, Karma Authoring Tool, UnrealScript IDE, UnrealScript Debugger and exporters for Max and Maya."
"The runtime will be a free download and free to use for non-commercial and educational use. It will include a sample level but no game-specific content."
The engine is still available for commercial licencing. For full details, click here.