The very basic problem that a creator of a game engine faces when it comes to scripting the game engine is: what will be the language that will be used. Of cource there is the option of creating a custom language for the purpose, but today with the plethora of scripting languages available it doesn’t really make sense to go through all the development process of a custom scripting language. No matter how big the development team will be, it will never be possible to match the man-months that have gone into an existing scripting language.
I will try to introduce the scripting language Python and more specifically a special version of it, the Stackless Python, as I used it in the implementation of the Sylphis3D Game Engine. For a basic introduction to game programming with python I suggest you try this book : Game Programming with Python.