Hey dont give up. great things are done with this engine all the time now.
Try it this way.
Always use a real floor segments for your floors. Get rid of the floor where you dont want it.
Character dont like to walk over the edge most times.
Walls and detail: There is not much room in an 8'4" square room segment. So the littlest protrusion out of the wall can make a big deal in a small hall way.
Have different details for such areas.
Hallways 2 levels high with most of detail in the upper section.
Have one segments with the floor and the bottom wall with maybe a small bit of detail for the base. No more then 5 to 10 units as the walls in a full segment are 2 thick at 5" total.
The upper segmant would have the floor also, (which you could delete after you placed the walls). you could add all the detail your machine can handle and its above the players height and most characters, so collision issues are reduce greatly.
Taking away from the boxyness of the editors layout.
I have seen round corners work great, ramps work great. You can force climb over anything up to 70 degree angle for entities and segments like cliffs and stone walls. Make these all as seperate segments. Cosmics prophets stuff and other numerous forum member have contributed for free. There are tons of examples available to learn from.
Look at the examples that come with the install and play with those to get ideas.
With the above you could place stratigic entites in areas you would require more detail.
Other option if you can model is: Still use segments for the floors.
But make entiys that you can use as wall. Tile them up based on a wall segment being 8'4" wide, You can go 2 to 3 segments wide and tall and still get great results. You can mix these as static or dynamic as needed. with collision working. Take your full pieces and slice them up to match these dimansions and things work great. More work, More glory and awsome it looks when you complete.
You can check this out as an example: This scene was created by chris holden for UDK. www.chris holden.com is his site. He gave us permission to put it into this engine for a game WIP that I am involded in. Took a while to cut it up and place it, but it was worth it in the the end. Sorry veoh wont embed in this forum. Worth looking at.
http://www.veoh.com/watch/v21134035jb5kWh7d
As the level has progressed now, its At 245000 polies with 15 characters for puzzle and 8 passage blocks and numerous eye candy animations going on and still getting between 35 - 50 fps on an old dual core machine running XP with a nvidia geforce 8500 graphics card. I should post another vid with progress.
Other things to remember is that a great texture and normal map can replace complex geometry. Check out the scifi stuff that come with the engine. the textures really make it pop with the shaders we have now.
I agree that the segment editor is a bit old and touchy some times.
I just take an stock fps file and put in my changes for media and textures and shaders and have them work flawlessly in about 20 mins each. There are a lot of good stock segment pieces (x-files) that come with the engine out of the box, that you could retexture and change the look and feel of the layout.
Its all up to you and what limit that you put on yourself and the limits of your machine.
Yes collision could be better and one day it will. Its come quite a ways since it started, but it is still a basic language in programming. But for the price you can really do a lot with it now, with no other licsence fees attached. So please dont give up on making your stuff work