The comments in the video say they are running the software mode, not hardware mode.
nV hasn't unlocked the abilities for the HD series yet. It could easily do it (some people think more effectively than the GF and GTX series due to branching and batch size advantages), but it would require nV to allow it, and right now they don't and AMD don't want to support it either, so to do it either you add an Ageia card in Vista & XP or an nV card in XP only.
Cuda is an application layer for GF hardware so I doubt that's it.
There was alot of talk initially about running PhysX on the HD series, but the guy who said he got it to work (a member of NGoHQ) suddenly STFU and hide away from all questions after being contacted by nV.
If something new has come up please share, I'm not saying it's not possible, I'm saying it's not currently enabled through standard methods.
If you are running XP you can use a cheaper NVidia GFX card for Physx, I don't know details about this but IIRC an 8600GT wil do OK, if you are running Vista this will not work - Vista only lets you load one Video driver.
and people there bitching about it and saying to ask here about it, since alot of their traffic is coming from the THG article.
At this time it just looks suspect, GPU-PhysX will be dead and gone replaced by something OpenCL based or Havok based before Eran posts anything worthwhile. Whether he was BSing or nV locked him down doesn't really matter the end result is the same, he got people's hopes up and delivered nothing (not even a word of an update on the status).
So like I said, if anyone comes up with something CONCRETE and IN ACTION please share it.
I was under the impression the entire reason NV bought the Aegia Physx intellect was to incorportate them into their cards...IE, mid/high end gaming and desktop Quadro rendering. Also, like others mentioned, the ability to utilize a lower end card as a stand alone physx card to support another gaming card was also to be part of the equation.
Like I said in the original post, if YOU like the features and effects it brings to the limited number of games it impacts, then it's a good idea, I have a friend who LOVES the effects on UT3, for others though it's not a big deal, so it's not easy for anyone to guide you because some games like GRAWI/II and UT3 can give SOME people great experiences, but only you know if it's worth it to you.
For me the impact on UT3 was artificial and was more like an interesting Tech Demo that I called "UT3 with Debris".
I recommend you check the you tube video of the effects in action (not the other technical and experimental stuff) and see if that will enhance your experience enough to be worth it. Other people will just tell you their opinion of that experience.