Let the confusion begin!
MotS and JK both made use of pre-rendered and in-game cutscenes.
The "in-game" or more properly "game engine" cutscenes were like the scripted events and camera pans you saw that you couldn't control. Indy Infernal had those too, etc.
The pre-rendered stuff were like the ones in MotS (which were BASED on game engine stuff, but pre-recorded and played off of the CD), and the FMV/CGI cutscenes in JK.
The Quake3 engine can do both. The games I've seen though, using the pre-rendered ones didn't look too good (Quake3, Alice), because the cutscenes were really grainy and the color was pretty washed out looking (although the game itself was in lucious 32bit color and high res, with a high framerate). Of course JK2 will have in-game cutscenes, at least if I remember correctly, according to Raven, which is fine by me, although I miss the "mini-movie" style of JK.
Still I can see that the time and money involved in making cutscenes of that magnitude is probably something not many developers are willing to undertake, considering people will probably just watch them once or twice (although I will admit my first roommate and I were so impressed with them initially, we made popcorn and watched them like a movie, hehe). ; )