PhysX is is a tool utilised by nVidia cards that allows real time physics calculations to be made on the GPU itself. This allows more realistic physics to be simulated in games, instead of seeing "scripted" physics that developers had to program and you'd see the same animation every time you activated the input. Only some games incorporate PhysX into their games, Mafia II being one of them. On the nVidia website it says the developers used PhysX to incorporate realistic cloth simulation in their games.
Sometimes I think there is an option in the graphical settings to enable PhysX on the GPU - perhaps that is why you didn't notice a difference. Or they just coded the cloth animation well for AMD cards so the difference is unnoticeable.