For all the people suggesting C++: as they say in France, "Le no." It is notoriously hard to parse correctly, which results in compilers that aren't very smart about giving good error messages -- a huge factor in a new programmer's ability to learn the language. Besides, anyone that wants to develop in C++ can already use it to build DLLs; not a lot of special support needed. I don't know much about AngelScript, but dear God. C++ has many strengths, but its syntax is not one of them.

Either Lua or Python would be a perfectly fine choice. The tradeoff there is that while Lua runs a lot faster (since it essentially "compiles" into bunch of function pointers, whereas Python becomes bytecode which is interpreted), it doesn't have much in the way of a standard library. Even for such essentials as string manipulation, you have to roll your own or find a third-party library. They are out there, but there is no "standard".

Python, by contrast, adds a big hit to your binary but that's because it includes a rich standard library. Yes, there's the "web server in 3 lines of code" stuff, but it also thoroughly covers the bases in terms of data structures & algorithms, which are useful in a wide range of situations. It also has a compiled representation of bytecode that can be written to disk, which can save you on startup time if you have a large number of scripts to deal with.

Not in its favor, though, Python is a bear to integrate, although that might have changed since the last time I looked at it. Barring that, Lua is the hands-down winner there.

I also find Python script has a high "torque ratio," i.e. you can get more done in fewer lines of code, and I second (or third, or twelfth) the "easy to learn" mantra. I recognize that some people have not found that to be true, but having taught Python to non-programmers in the past, I will say that those folks are anomalous.

IMHO, Lua works best if you are looking for a thin, dynamically-modifiable layer you can use to drive functionality exposed by the game engine. If you want to do extensive game logic, I would prefer Python due to its vast standard library. That being said, I will reiterate: either one will work.

Shakespear.

/sarcasm

I would just like to throw it out there that I decided to try to learn C++ while waiting for a scripting language to be announced. Imagine my surprise when it turns out I already know the basics. Apparently I've been using a c-like scripting language for years. I'm still going through the tutorials but so far it's matching up quite well. The preprocessor and declaring data types are a new step, arrays look needlessly complicated... but all in all I think I might just stick to c++ (or angel script, it it lives up to the hype)

Speaking for myself, Python sounds like a PITA with the white space issue.  It also sounds like Lua has more industry support. Lua sounds like it's more of an object based language like Smalltalk.  Smalltalk takes a different mindset but it's not a hard language to learn once you make the mental shift.

As far as C++ goes, I don't think the idea was to replace Lua/Python with C++ but to augment it.