Wow, I leave for a day and there are almost a page full of questions . Hopefully I will answer them all. If not feel free to ask again.
1. The entire engine will be built from scratch in the old OpenGL with the goal of being cross platform. As far as I know, the 3DS doesn't have a homebrew scene therefore it cannot be ported to the 3DS because there is no way for me to program for it.
2. I will be making a Level Editor first. Since the entire game revolves around the level editor is is kind of needed. No the level editor will not be accessible from the menu. It will be an entirely different program. I don't know about a sandbox thing, but I guess I could make a 'test level' part to the level select screen. You make the level in the LEVEL EDITOR then you move the file over the game and select 'TEST LEVEL' in the level select which will disable the timer and deaths. Again just ideas nothing written down yet.
3. I'm aiming to recreate the videos seen at E3. Which to my understanding is Coffin's engine though I don't know the details. Andrew and I refer to the E3 videos as the 'Saturn Version' and the version shown later by Chris in ~2006 as the 'PC Version.' Chris said this wasn't entirely correct, but that is how we describe them.
I plan on remaking the 'Saturn Version' while Andrew plans on remaking the 'Saturn and PC versions.' I know the 'PC Versions' look better, but I don't relate to it as much. This is because I've always remember Sonic Xtreme as the videos/pictures shown in the magazines during the 90s. If Chris Senn never released the videos/pictures of the 'pc version' I/we would have never known of their existence. I also assume that people who haven't been keeping up with Sonic Xtreme wouldn't know that the 'pc version' even exists.
4. I'm not sure what you mean by 'do you think xtreme or a different sonic game could actually be done in Source'
5. OpenGL can do anything you want it to do. If you program it properly it will do what you program it to do. OpenGL is just a library that allows simple cross-compatible access to the video cards. Don't think of OpenGL as a game engine, because it is not. A game engine is a compilation of codes used to make games sometimes so high level that they can only make specific games. OpenGL is not that. It is a graphic library. It makes pretty pictures based on the code it is fed. That is all it does.
6. But to answer your question, yes that would be my goal for a level editor.
7. As Andrew stated. UDK is closed source. A software render is not your solution for UDK. UDK is an advanced engine. If you don't have the power to render it with hardware support, there is no way it will work with software.
Think of it this way. Your computer has 2 Processors.
-One is set up to crunch numbers, the CPU.
-The other is set up to calculate vertex, the GPU or graphic card.
If you enable software rendering you're taking all the information that is normally sent to the graphic card and sending it to the CPU. Now your CPU has to crunch the numbers and calculate the vertexes. It has to run double time. While it may fix the compatibility issue, you still wouldn't be running the game.
8. As andrew stated. The OpenGL engine will be self-sustanable. Most of what is already made is good to go. The only help I would need is with custom sprites and models (Nack, MetSon, Guardian Sphinx), but this is where our engines will probably differ again. Andrew has been cleaning up the models such as adding more vertexes to the models, but I plan to keep them as original as possible. Though they may still need cleaning up.
An example I can remember is the sonic model uses a glitch on the Saturns rendering system. While it would look correct on the Saturn it would look wrong on the computer. That would have to be fixed for my version.
9. The level system is basically how many posts you have. There are some exclusive levels that are by invite only. Level V is by invite only, but it doesn't mean anything. I don't know what I'm going to do with it. Maybe official testers who knows. Level IX is moderator. and Level X is admin.