The physics sdk is called Novodex. It’s available as a free download for Win32 for developers to have a play around with. It still lacks some features (fluids comes to mind), but AGEIA has an ace up its sleeve in the PhysX chip that could blow its competitors out of the water much as 3DFX and nVidia once did with graphics accelerators. Needless to say, it’s bad news for Havok if Sony will be supplying Novodex with its dev-kits.
It’s mildy amusing they keep pushing the Cell processor in the press release. My understanding of the newest generation of hardware is that it will be a horrendous platform for physical calculations and other code which needs to be run in-order. I bet they’ll be having fun optimising the SDK to run well on Cell.
I also suspect Novodex is also in the 360 dev-kit since Epic (afaik) already integrated it into the Unreal3 engine.