Beam effects include such things as electricity moving around objects and the most realistic 3D lightning ever seen. Yes, that includes Unreal's lightning, which is quite nice by itself. Jay also says smoke will be in the game, but I did not see this feature. This means you can do things like leave bullet marks on anything you shoot at or scorch marks from grenades. These looked so real that I often shot things up just to see the decals.
Scorch marks overlay each other realistically, getting darker the more that the spot gets touched.
What is actually happening is the textures are being laid on top of each other. Wire glass gets spidery cracks in it around the bullet holes before eventually shattering. The best part is that you can use these in deathmatch so you can mark your kills, taunt your foes, and give the place a war-torn look. To everybody's liking, blood splatters at the right spot on the wall when you shoot or kill somebody. You will be able to spray paint spots to mark where you are in the level or how to get out.