Many of you may have heard at the User Conference this summer that ArcGIS Engine 9.2 will support the Geoprocessing Tools previously only available to ArcGIS Desktop users. That means that developers of Engine applications will be able to leverage the geoprocessing tools in their custom solutions.
Here is a link to a table of what tools are available at what license level for Desktop. For Engine, all the ArcView level tools will be part of the standard Engine Runtime and the ArcEditor tools come wit the Engine Geodatabase Update extension. Other Engine extensions will add more tools at 9.2.