TG Daily had an interview with AMD about the effort to get PhysX on Radeon cards and their Havok strategy. Here's a snip:
TG Daily: What are AMD's thoughts about GPU-accelerated physics?
Cheng: There is a time and place for everything, including GPU-accelerated physics simulation. The model that AMD is pursuing is a balanced platform approach and offloading to the GPU where it makes sense. There are a few factors that we considered when we formed this strategy:
The primary technical challenge today for video games is rendering. Rendering will remain the limitation for realism and gameplay for the foreseeable future. It would be better to focus the GPUs on rendering to provide the best game play. Also remember that when you create more objects or rigid bodies with physics simulation, it further taxes the rendering system. There are scenarios where GPU physics simulation actually slows down gameplay and decreases the experience.