Tom's Hardware has an interesting article up today, with an in depth look from a scientific perspective at the issues behind in game physics. Are dedicated PPU's like Ageia's PhysX card the wave of the future. Can GPU's take up the task? Or, is the issue really more complicated than it at first seems? A quote...

Ageia recently released its PhysX card to the public, and it didn't take long for Nvidia and ATI to in turn present their own take on how to calculate physics. There are some, however, who say that none of these methods is especially good for the task. According to physics scientists, there are just no algorithms good enough to yield satisfying results.