The Physics Processing Unit (PPU) will take over the physics calculations load from the regular graphics cards. NVIDIA also said both Unreal Tournament 2007 and Gears of War will likely support this feature.
The company also said UT2007 and Gears of War will use the Novodex physics engine and not the Havok one.
Another yet another tiny tidbit: gamedeveloper Rockstar licensed the Unreal 3 Engine for a future title.
Source: Kotaku