The developers found a way to make 3-D models morph. Much of the game takes place in a big haunted mansion. In haunted house games, the mansion usually feels tiny or outrageously huge, but in Undying the rooms all seem to be about the right size. Undying also avoids the clich of being a really dark game. Almost the entire game world is plainly visible.
Dark areas are very small and can be easily navigated.
The monsters are, without a doubt, some of the most twisted things you have ever seen in a game. It's the quality of the artwork, more than the power of the Unreal engine that makes Undying look great. The ingenious use of sound really pushes the level of immersion over the top. Most FPS games give the player a driving rock soundtrack to kill things by. Undying uses music very sparingly, relying on ambient noises to flesh out the environments.