I have a nvidia 250gts and i am getting problems with the PhysX,
when ever i turn on the PhysX settings and play Mirror's Edge,
the game lags, on the other hand when the settings are off,
the game works great with 65fps.
I had a 9500 gt prior to this and had the same issue.
I also tried to install the latest nvidia PhysX drivers and card drivers.
Still the problem remains.....
Ohh well you need to understand that the physX in mirrors edge is Really hard on GPU's, and even my GTX280 laggs when i have it running. UT3 isnt that hard for some reason becuase everyone i know that has a 280 or 275 laggs when playing Mirrors Edge and doesnt lagg when playing UT3
sorry but its just that fast the you need to cards to play that game with physx, but to really test it out download the demo for batman arkham asylum and see if that laggs with physx for me it didnt so it should for you !