No Physx does not increase frame rate. it decrease the frame rates instead as GPU has more data to process now. Anything above 60 or 75 frame rate depending on your LCD monitor is useless as monitor can't display due to lower refresh rate. It only adds more realistic physx effect in games. here a example for you.
http://www.youtube.com/watch?v=D2cs1o_qqAI
but list of games supporting physx is not that big.
personally I would rather have more physx effect with 60 frames instead of have 100 frame rate with minimal effect. Geforce 260 is good card you should be able to play most games with physx enabled. Just install the latest drivers from Nvidia website and select physx effects in games that support it.
here is the list of games that support physx
http://www.nzone.com/object/nzone_physxgames_home.html