Anyone who watched comparisons between Borderlands 2 with PhysX enabled and disabled could see how much physics engine is adding to visuals. And not just usual stuff like rigid body physics, particles and clothing - seeing fluids flowing and making puddles is really something that makes you wish all games have those things incorporated by default. Unfortunatelly, once again it's an age old problem - only owners with nVidia cards can enjoy it.
Lot of the talk about next-gen consoles' GPUs is about how powerfull they will be and what graphics they will be able to push, but if rumours turn out to be true that all 3 consoles have AMD/ATI GPUs (and eveything points in that direction), we'll see unique situation where developers for the first time can finally mainstream GPU accelerated physics - unlike nVidia who uses closed proprietary solution, AMD has been pushing for OpenCL physics, so it is reasonable to expect that something like Bullet Physics (or Havok) becomes a norm - engines that (in theory) are supported by all OpenCL capable cards, and not just from one manufecturer.
My opinion is that this will make developers job much easier in deciding to go "physics" route - they will be able to incorporate physics engine as part of the visual desing, knowing that their game will look (more or less) the same on all platforms. Rumour is that nVidia is making OpenCL version of PhysX, so whatever solution developers decide on, let's hope it will bring "visual physics" as default.
List of games that use one of 3 popular physics solutions:
Havok: http://en.wikipedia.org/wiki/Havok_%28software%29#Havok_in_video_games
PhysX: http://en.wikipedia.org/wiki/List_of_games_with_hardware-accelerated_PhysX_support
Bullet: http://en.wikipedia.org/wiki/Bullet_%28software%29#Commercial_games









