There's some fairly decent machinima out there; "Apartment Huntin'" springs to mind, and there's one based on the Quake engine that lampoons 70's cop shows. I don't remember the name, but it was actually quite funny. But the guys at machinima.com seem to have a REALLY high opinion of themselves, and I'm really not sure why, when the bulk of "game movies" are about as creative as the latest Star Wars "two guys in bathrobes have a lightsaber battle in the forest" fan film.