HardOCP has an article on effect physics and gameplay physics:
There is a lot of potential in what dedicated hardware physics acceleration can bring to your gameplay experience. Undoubtedly gameplay physics is in its infancy even though the basis has been around for a while. The industry itself is still trying to figure out just how to go about it in a way that will benefit the gamer the most while not sacrificing a game’s sales to a small install footprint. All the differing opinions and marketing fluff make it quite confusing to gamers and us at HardOCP as well. We were confused about some things and decided to ask some very pointed questions to all the gameplay physics suspects.