To reply to everyone: Of course they have improved the previous engine, but im really skeptical to how much they can improve that engine with out rewriting it from scratch.
Im very familiar with the way valve builds their engines and developers tools, since i used to be a pretty good leveldesigner for HL and somewhat for HL2.
As for Left 4 Dead keeping up with modern games, thats just not true.. it does not look as good as Crysis or Unreal 3, and its not long now until the next generation of graphics engine comes out.. which means that by the time that Episode 3 is released, its still 3 generations old.
The AI in Left 4 Dead is still the same as in HL2, with the difference that they implemented a director, which makes it more dynamic in the ways how they act, but not how they interact with the world or how they use teamwork etc.
Also, Left 4 Dead still doesn't support parallax mapping, they still use normal mapping.. which is just wrong.
Edit:
Oh, and about the physics.. i didnt really think it is that good by todays measures.
It had horrible ragdolls and when a box fell of another box it looked really awkward, sure, it was cool for its time, but damn.. check out any other modern game that uses PhysX, where cloth can be shredded dynamically, and if characters die in a stair, it actually looks like their falling down the stair, not like they are having some sort of seizure!