We learned that the DirectX 9 and the Open GL has a lot of latency for every physics and graphic operation. DirectX 10 solves this problem very aggressively as Vista and its Avalon graphics subsystem uses the 3D graphic engine to render both fonts and desktop in Vista or to do a graphic.
DirectX 10 also adds the capability to implement a lot of independent objects in a scene and will let you add many details and small objects that will help scene realism. In another way, it will also help you with physics as the collision detection might be a little bit easier with more objects under DirectX 10.
The game developers want to stay away from GPU Physics as much as possible until it gets more mature. It is described as very complicated and it can easily trouble your gaming engine. This is the reality today and we don't think you will see any serious physics graphics on a GPU in 2006. It is the feature for 2007 and the future to come but we are sure that many companies will start to use it at then.
Last time we spoke with ATI about physics we were advised that this is something to come in the next quarter or so - when the games are ready, to be precise. Apart from a few technology demos you cannot really talk about genuine GPU physics in real shipping games.
Even Ageia, which has a good driver, has only a handful of games to show at the moment even though the situation may drastically change in the next few months. ยต