The retail version of the editor is something I have been following for more than a year now.
If you remember the original Unreal had a picture of a retail editor mock-up box in the catalog. Then it was decided that the effort to do a commercial editor was not worth the return finacially, as it would have a narrow market. That and the beta worked well enough, so why bother.
Well, many time I have started threads about why a commercial editor was a necessary and good thing. Many people want it to remain free, but there will ALWAYS be a free UnrealED so that arguement doesn't wash. They need some free editing support to foster a user community.
As for UnrealED now, it is going to get a C++ rewrite but I expect that to get pushed back many times as it has already. Tim is really going to lame out on this, because Mark will tell him there is no financial interest in spending time rewriting the editor when they have one that works fine. The funny thing is that Tim is willing to look at UnrealScript and see the need for rewrites when it works so well already. Why not the editor? If he waits to get more of the structure and new engine done first (which of course make sense from one angle), the new C++ rewrite will wind up only working with the new engine, and still they won't see the editor as a potential commercial product.
Basically, I think we are stuck with this editor for the duration of these products. The only hope is if the new editor has the promised plug-in modular architecture and they take the time to make it backwards compatible. Tim once said that the current version was very tightly coupled to the engine thus making improvements without a total rewrite difficult at best. My point is I don't think they will focus on a C++ rewrite for Unreal/UT editing, only one for the future needs of the new system.
I think Tim really wants UnrealED to be the true interface to the Unreal system, but he needs to waken to the fact that UnrealED is the real product and the games are just content packs. Make a commercial version fully enhanced and a free version that can do simple editing and scripting and both camps will be happy and the project paid for. And it should work with any Unreal product to support the most customers, which is what we all are after all.