EDIt: and one question .. Is cell shading used?
No, cel-shading is a form of non-photorealistic rendering where lighting values are calculated for 3D models but then, once calculated, are simplified to a very limited set of colors (for instance: black, grey, and light grey). This creates a really defined set of shading values that give in-game assets a very cartoony look.
What we're doing is more of a mix of traditional 3D engine effects, a thick edge outline, and a very unique art style.