An anonymous discussion has lead The Inquirer to report that ATI and nVIDIA’s phsics engine, designed to run directly on thier cards is nowhere close to the technology Ageia uses in their dedicated PPU.  Mind you, we are still waiting for DX10, which may change that.
“AN ANONYMOUS games developer claimed that ATI, Nvidia on GPU physics is not even close to what you can get with Ageia’s Physics card.

He tried to implement the physics and said that to his horror he learned that ATI and Nvidia “cosmetically” affects the physics. The developer added that only Ageia can handle game play physics. The same level of physics quality cannot be achieved using GPU physics, and even high end cards such as X1900 XT or 7900 GT cannot handle it.”

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