Jonas Beckeman has created Endogine. It is a sprite based engine that uses D3D (or GDI, though its slower). He also has another webpage about it.

Some features (follow the link above for the full list):

• Sprite hierarchy
• Collision detection
• Procedural textures (Perlin/Wood/Marble/Plasma/others)
• Particle systems
• Widgets (button, frame, window, scrollbar etc.)
• Example game prototypes (Puzzle Bobble, Parallax Asteroids, Snooker/Minigolf, Cave Hunter)
• IDE with scene graph, sprite/behavior editing, resource management and debugging tools

Looks like quite a fully functional system, and unlike other open source engine, this one is still being worked on!