As for Nvidia SLi Physics, personally i wouldnt like my graphics card to render frames and do physics
Interestingly in todays news it was noted on the Alienware site that the 7900GTX SLI is not available with PhysX. So one or the other.
Also (last point), AGEIAs card you dont have to keep upgrading like a graphics card and CPU so it is a good safe long term investment.
A little birdie (ok, the AGEIA press releases) already announced "value" (read: slower) SKUs and that they are working on future products.
What you are saying is akin to when the first GPUs came out: "I will never need to upgrade!" Sadly it does not work like that.
As the market expands we will see how it plays out I guess. I am curious if Creative will get in on the action... which brings up an interesting point. Sound cards used to be all the craze. I remember my dad's first SB and when I got my SB Pro. I remember in 1998 getting an MX300 A3D. I have an Audigy 2ZS currently. The problem is, from a market perspective, is that even a $50 sound card--which sounds better than the integrated audio and offers better performance--is dieing off. Why? Because the standard parts in a PC work well enough.
Call me skeptical, but if $50-$100 sound cards, which had great market penetration at one point, were weeded out by slower, but cheaper, integrated sound... how is AGEIA going to fight an upstream battle with no market penetration, more competition (Creative had a virtual monopoly), with an expensive product?
EAX has a lot of dev support, but in the long run it is pretty much moot. You can get the same experience for the most part elsewhere. The fact they do have faster PPUs in the pipeline indicates that this is not a one shot deal.
Well what I think it will allow for is fully deformable terrain and environments in multiplayer games (not necessarily MMOs though cause it'd be bad if people blew a hole through the world).
The problem is with online play is whatever you do in your world has to be transmitted everywhere else. You can do pre-canned destruction (see: Black) but once you talk about dynamic realtime deformable terrain and destructible content ALL that content has to be passed over the internet. Servers lag with 64 people shooting guns, the thought of people blowing up buildings with tens of thousands of individual parts is asking too much (unless it is not interactive and pre-canned ala Soldner).
That is the problem with physics. Once it impacts the gameplay level (i.e. just not junk blowing up and disappearing/making no impact in the world) you make online a huge hurdle and you also divide the userbase since many users wont have the hardware to accelerate it.
Sticky problems. Publishers in my estimation will fallow the money, which is where the install base is. It is important for AGEIA to sell millions of PPU cards.