The Source engine is a 3D game engine developed by Valve Corporation. Its unique features include a large degree of modularity and flexibility, an artist-driven, shader-based renderer, accurate lip sync and facial expression technology, and a powerful, efficient and completely network-enabled physics system.
The Orange Box (TF2) engine is getting very bogged down with the continuous updates to TF2. With the amount of stuff they add with each update, I will not be surprised if they move on this year or the next, because 2.8 GHz dual core users like myself can no longer run the game with efficient and decent performance.
The engine is starting to show it's age if it hasn't been doing so already, mods like Portal Prelude pushed the engine to it's limits and the author had to compromise on the last level of the mod, because of the limit. Many users crash on that final level, myself included, and cannot complete the mod.
However, even with all of it's drawbacks, I still see it as a decent, if not great engine to have. At the same time, I know that Valve can do better and improve things with a completely new engine, even for the rather small amount for resources that it has (compared to other game developers); nothing is perfect, but there is always room for improvement.
This engine has a lot of pros and cons. One one hand, it's very easy to get into and it can look pretty damn good in the right hands. But on the other hand, you got a 7 year old tool set with mostly command line tools that Valve breaks when ever they get bored. And depending on the version of Source you use(2006, 2007, 2009(no code), AlienSwarm, Portal2(no code)), you might get stuck with half working features(like shadow mapping in 2007).
The main pro is; the fact that it comes with an entire game(2006/2007).
Main con is; half working tools that love to crap out for no apparent reason.
If the tools were in decent shape, and if they would release more fully working(AS has no shader support) codebases. Then I would give it a 10/10 and wouldn't be in the process of learning the UDK.
Now its beginning to get older, and after using tools for engines of the past 3-2 years, it does begin to show up Source.
It is still a great engine, it works on many set-up's, it does not take much at all to get a map started, and with some basic logic, and the modelling/importing process is not at all difficult, however quite lengthy for today.
Writing out QC's and ensuring it is correct is sometimes a pain. Although basic models are quite easy, whereas certain commands and tasks can be a tricky, and touchy, fixing it can sometimes be something very minor, which can be overlooked when you have a complex QC, especially for characters and vehicles.
Compling maps, in the way Source does, is very old and patience is needed if your not used to it. Models not so bad, but for most engines these days its a one click export, and material files are made on the spot with little manual work aftewrwards. Its purely speed and convenience.
Well documented, everything you need to begin with and learn is in the Valve Docs.
Great games can still be produced and mods, but every year it gets older and even despite the updates valve provide it, other areas are still far behind.