There are already realtime physics demo\'s on the net which enable you to pull apart a virtual cow with your mouse ; and it looks creepy real.
MotorStorm is already a game which\'ll feature \'mild\' implementation of gameplay through physics ; kicking up dirt which alters the terrain which can be a means to best the other race competitors.
Personally, I think this is how PS3 will distinguish itself from XB360 ; physics gameplay at lower framerate drop \'cost\'.
The emphasis of discussion has been way too much on solely, console GPU\'s.