Turning on PhysX isn't necessary for gameplay, and you'll never miss it if you don't see the effects. However, when PhysX is enabled, it adds superlative nuances and really creates some “wow” moments. The chunky explosions, cloth effects, paper, fog, and environmental detail enhancements are very cool.
Once hardware-accelerated PhysX is enabled, this is another matter entirely, and those of you who want the best high-resolution PhysX performance will need to consider an Nvidia graphics card more powerful than the GeForce GTX 260 or a dedicated PhysX card such as the GeForce GT 220. There is a high price to pay for PhysX performance, but I have to admit that the eye candy is a lot of fun to watch. Once you've turned it on, it's not something you'll turn off if your hardware can handle it.