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*Insert obligatory name joke here*
I don't see how Havok is a bad engine. It's been used in countless games as a base and does the job pretty well if you ask me. To be in a position to call the Havok engine awefull you'd have to play a game that was actually built with the Havok engine's original base, not with the engine a third party developer built around it.
Havok does physics and it's damn good at what it does IMO. Havok is damn good, wether you write it with a C or a K.
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http://www.youtube.com/watch?v=3Z537VOpiNw
http://www.youtube.com/watch?v=2h7MwXZGGy4
http://www.youtube.com/watch?v=IGTN9rEzxa8
http://www.youtube.com/watch?v=5MPoFWMRKtk
In my opinion Havok games generally have really floaty and unrealistic physics. Not that I'm complaining, though - look at all the hilarity that ensues as a result.
(Side-note: Source uses a heavily modified version of Havok Physics)