According to Steve Polge, lead level designer, UT2007 is going to be a larger shift than UT2004 was from the original Unreal Tournament. Everything has been written from scratch with the highly popular Unreal Engine 3.0, new physics engine, and presumably brand-new netcode that takes advantage of stitching maps together and streaming information from the server to the client.
Source: http://xbox360.ign.com/articles/613/613211p1.html