Source engine and fabrics?

[Yakuza]

Any guesses on how the source engine will handle clothing such as trench coats and or capes.

Just wondering how much animation I will have to do.

[Murray_H]

Flag (http://www.farbflash.de/curtain/)

That was made using the Havok engine, so i would guess summit along those lines in Source. That is if ay soft-body technology has been implemented in it, they might have just left soft objects out of it....