1UP had a chat with Tim Willits and Todd Hollenshead from id Software. Here's a snip about the development of Rage:
1UP: Where is Rage in development right now?
TW: Last year we were still in the prototype stage. Remember, we were trying to figure out exactly how the physics would work with the different types of vehicles. Well, we've got all that stuff answered. We are in media-content-creation overload. We're trying to get as much of the game done as quickly as possible. We've got the story done. The technology has a few more things that have to be worked through -- John's busy with that. We've gone through all of our prototype phasing. We're very happy with the vehicle- and vehicle-combat feel, because we want to make the vehicles an extension of your first-person avatar. And we want players to feel attached to their vehicles. You keep the ones that you have through the whole game, and you can upgrade them and add themes to them. We wanted [it] to be more than just walking around aimlessly picking up cars to drive around. We want you to feel attached to them, and we've got that stuff figured out. We're just working on finishing the game right now: building the levels, building the characters, and making it as fun as possible.