Based on personal experience using the Ageia physX libraries (code wise). I think Ageia actually has a very strong foundation in the industry. Their code is freely available (in my case, used in a student project), and is INCREDIBLY easy to get up and running in no time. Which is an advantage over a few other phsyics libraries that I had experimented with (Newton, ODE).
Albeit, when I was working with the ageia libraries, they still have yet to get triange collision working properly (if they are at all going to attempt to get it working). Which right now is a _major_ disadvantage of using their libraries as opposed to some other ones.
The major advantage, of course, is that you can offload the physX code over to the physics card itself.
Honestly, they have a very good software product going right now, so at the least, I think they could stay afloat by merely licensing out their physics library. (We ran all our code without their card ha ha, but we didn't use anything too advanced besides some height map collision and some of their own special collision body detections).
Honestly, I don't think I'd invest in a physics card that cost more than $50. But meh, I'm also a broke college student
And really, these guys are far from stupid. They're just desperately trying to get everyone onboard with offloaded physics and intense environments. And seriously, if a friggin dual core got bogged down on a cloth simulation (I hate to tell you, but that stuff is increidbly complex computationally, go try a cloth simulation in maya and see how long that takes to render in NON-REALTIME). You have _VERY_ little hope of getting your physics code to run off just the second core of a processor (which I thought was possible initially until seeing this benchmark).
Now, when we get up to quad cores, that will be something entirely different. Somehow I doubt you could destroy 2 whole cores on properly written (read: as inacurate as possible to allow proper real-time computation) physics code.
I guess the future holds that prospect in sight.
Also, physics code is most definately here to stay, so everyone get pumped for some serious stuff in future gaming! (which is what it's all about isn't it?)
-T