Sintel is an animation made with Blender, a free, cross-platfrom 3D graphics application. The movie was made in order to show what blender can do, and it looks like it can do a pretty good job. The story isn't very solid, but the graphics look great.
All the contents of this short film are open source so if you want to make something like this, you can. You can go to sintel.org for more information.