I've been aware of the existence of Machinima for a while, but as I'm not into video games, I haven't bothered to search any out. If you're not aware, Machinima are films where the visuals have been created using videogame graphics.
Slate.com has story on Machinima that includes several samples. It's a good, quick, primer as to what it's all about. Personally, I found the music videos based on songs from Avenue Q and by Avril Lavigne to be the most satisfying pieces, mainly because the music created a structured narrative for the visuals.
The most interesting thing about Machinima to me is the democratic nature of it. Not everyone can draw or create cgi characters and environments, which in the past prevented many people at trying their hands at animated films. Machinima provides people with ready-made characters and sets and game play educates them as to how to get visual results on the screen.
I don't want to re-open a can of worms, but I have to add that in their way, these films are motion-captured. They're definitely not created by keyframes. While the Machinima creators are not wearing body suits with tracking markers, their real-time manipulation of controlling devices puts these films in the mocap category.
It's only a matter of time, if it hasn't happened already, before there's a TV series or low budget feature created using this approach.