I have already used a game engine before and still continue to for my own projects with a game, basically its a general program for a game that gives you a set of boundaries and rules for that game and how is made. Texture budget, maximum amounts of models and triangles in an area, basically it gives a game something to take part in. Is rules that things can apply to (hard to say exactly). The engines come with their own programs, level designing on (exporting into appropoate files) A plugin to go with a 3d modelling program such as 3DSMAX and other things that are approapiate. Its programs working together to allow a game to be made, designed for game development.
The engines that I have heard of are,
Quake 1,2,3 (which use quite often for Jedi Academy)
Age of empires
One of the most well known engine i think is the Unreal one made famous by Unreal tornament. Other engines are not typically named after some games not making them we as well known. The CryEngine is also vaguly known with the game Crysis as well as "Far Cry" games which I havent played.
Subtractive and Addictive are terms which I havent actually seen but by links it seems to be a way a game level is created,
Addictive is what the Quake engine uses (which I use) and involves making shapes in a void of space.
Subtractive is what Unreal uses where to make objects you - things away from it. To me I think Addictive is preferable as it seems that things are easier to manipulate although from experience of using them its easy to make errors by "leaks" in the void. Subtractive apparently eliminates that error which In a way is good but im not so sure about the idea of subtracting things from other things.
Obvious disadvantages for propriatary technology is that its only limited to the company that has made it where for some companies it may be preferable for them to make their own engines to make their games work as they want to rather than to someone elses rules and regulations.
The next generation game consoles obviously want to be able to support more and more things, specificially models and sound effects. On the Quake engine that I have used I have wanted to create big war-like levels and things but because of the age of the engine its limited to only 1 specific thing so its impossible for a big action based level as it risks to have really bad FPS. Games are getting more intense and more detailed so its important for them as companies to get much better need to be able to do many more things.