Haven't updated this for a while so here's some news.

Originally I was gonna use as much of the existing code I had already in the game engine, but I ended up in writing almost everything from scratch. Again.

I've been busy writing the base code and tools to create content. Finally got my camera code working and I could get started making on the ship controls, the ship will be controlled the same way as in Freelancer, by holding left mouse button and moving the mouse the ship will turn to the direction the cursor is pointing (left - turn left, top right - up and right etc.). Got the basic GUI system with animated mouse cursors and text output capabilities (thanks to Nitrogen's nice library!).

The tools I've made are a simple object editor for importing DMF/3DS/OBJ objects, setting materials and such, the models are eventually saved in a XML/binary hybrid format. Got the particle editor to add explosions and thruster effects and I've started working on the scene editor which puts it all together and hopefully the end result will vaguely resemble a game.

I'll probably get the basic game engine stuff working for the next deadline, but there won't be anything that can be called a game yet, but I think that's ok because the stage 2 mentions only a game engine, which I already have, well sort of.

Here's some screenshots:
Level editor #1
Level editor #2