Just popped into my head.
Do you think using Cloth physics with specific settings to emulate leaves on a tree (e.g. palm) would work fine? 
As far as I know, the cloth is dynamic and rip-able, so why not apply that kind of effect to trees using cloth physics so then you could e.g. shoot at the leaf and it would be dynamically affected and could also rip/ fall down as well?
Just an idea, can’t try it because I don’t have U3 Beta.
What do you guys think?
That would be incredibly resource intensive to simulate plus you would not have the ability of LOD’s from the terrain system. So I guess really what I mean to say, is in theory yes, that would work and do what you want. In reality it would be far to resource intensive to set it up to enable that.
The trees made with the new Tree Creator have wind based deformation. Doing this with Cloth would be overkill 
Ah, alright.
I just can’t stand CryEngine having those super nice vegetations, where you shoot at leaves and they are affected by your shot, plus they can tear and fall off… Looks awesome lol
Perhaps with some ingenuity and some heavy scripting and possibly requiring render to texture, you could create Crysis trees that are able to be used in mass. However, I personally would find that much too troublesome. Although I do really like Crysis trees ;).
So does this mean you can add trees onto a mesh not the terrain and have it affected by wind? or is it still just for terrain based trees