Unless you have been living under a rock, you have heard all the buzz about Aegia’s Physics Processing Unit (PPU’s). It is quite an impressive piece of kit and it looks like it’ll be this generation’s major innovation.
ATI and Nvidia have jumped into the fray as well, with their own solutions, mainly focusing on using SLI/Crossfire configurations in which a videocard within that array will take care of Physics, while the other does Graphics, or some combination of this.
Extreme Tech has a very interesting write up about all the different ways companies are tackling physics, and how they differ, along with pros and cons of each.
Here's an excellent movie displaying a game called Cell Factor, which takes full advantage of Aegia’s PhysX card. I think we can all agree that is quite incredible, and something that can definitely change the way games are played, as well as looking absolutely stunning.
Heres a vid of the card doing Fluid Dynamics. Want one yet?