AVault fired off some questions to Valve Software's Gabe Newell about their technology plans, after the recent announcement that they had hired Mike Dussault, the former lead programmer on the LithTech engine (story). Here's an excerpt where Gabe directly responds to the question of whether or not they will continue to license an engine, or produce their own from scratch after Team Fortress 2 is completed (which uses id Software's Quake technology):

We are investing a lot in technology, but our strategy is not changing. We are still deciding what we want to achieve in our future games, determining if it stands to reason to license or develop the technology, and going from there. In terms of people, we are always going to try to convince the best people in the industry that Valve is a good place for them to be for the long haul.