Gears of War and Mass Effect series run on Unreal Engine, albeit slightly modified for each game but the core is still there.
Coalesced file is the collection of variables accessible in one place for final tweaking of the game for optimum balance etc etc before release. So you can only mod whatever the Coalesced is designed to store.
But we go lot bigger than that, already being able to swap out meshes, sounds, animations, even logical sequences, we're starting on animations now...
Basically our toolkit will be a homemade, Do-it-yourself UDK.
Entire project is open source and anybody can join. We have our code repository set up on SourceForge's Subversion repo and we use Microsoft Visual C# 2010 for all coding work.
If you could spare some time to check it out, or join up as a developer, it'd be awesome!