The official #MedalofHonor Twitter account state that the single-player portion of #MedalofHonor will use a “heavily-modified Unreal 3 Engine” while the multi-player will use DICE’s Frostbite engine.
“As many of you may have read, we are using a heavily-modified Unreal 3 Engine for #MedalofHonor’s single-player campaign” and “I guess the cat’s out of the bag. #MedalofHonor’s multi-player will be using the Frostbite engine”
Single player usually prepares the gamer for online play so I’m not entirely sure how this one is going to go over.