It really depends on the level your programming skills are at, what platforms you are targeting, and how much customisation of the engine you're planning to do. So there are a number of 'right' answers to this question. My recommendations would read roughly like this:
- For windows, mac and web development, and you've got basic coding skills: unity3d
- For windows and mac, and you want C++ engine source: C4 engine
This has a lot of tools, a strong feature set, with some decent graphics algorithms especially, and every license includes the full C++ source code, which makes it great for people with advanced coding skills. It has some features that you'd normally only expect in full commercial engines - a graphical scripting language, and live editing support for example. Its weakest point is probably the lack of good light-mapping. It's also a little more expensive and developed by a smaller team than Unity.
- For enthusiasts with C# skills, or people who HAVE to work on console: XNA
I've tried XNA at various times, but have found it to be more a hobyist's playtool than anything else. You can write complete games in it, but you can say the same thing about C++. As far as I'm concerned, the goal of an indie engine should be supplying you with as many completed tools and features as possible, to allow you to be as fast and efficient as possible, and XNA is still too much a coding environment and not enough a complete engine with tools to be a serious contender if you want to make an indie game which you expect to sell. But at least it does get you onto the Xbox 360.
Honourable mentions: DarkBASIC, The Nebula Device
I've tried Torque as well, and found it to be a 'decaying' product. It's no longer as clean in terms of architecture as it should be, and I found it sufficiently annoying that I went back to my own half-completed engine after a week or two of trying to struggle through it.
Also, you might want to keep an eye on the GameBryo website - they've announced that a 'casual' license is coming, which may be appropriate for indie development.