This is why Intel bought the Havok physics engine. AMD kills the GPU physics implementation. Makes total sense from Intel's point of view, last thing they want is for more processing to be moved off of their widget. This will probably also effect the PhysiX Accelerator card as well. Now the only hope for accelerated physics on the GPU is going to be Microsoft's APIs for physics acceleration.

Personally I think that this sucks. I mean I didn't have much hope for physics acceleration as being the next great thing with regard to video simulations but I do think that killing a project just because they don't have a good competing product is a bad thing. Both Nvidia and AMD/ATI are trying to increase the amount of usable computer power while Intel is just trying to maintain their competitive advantage.

I want to see more and more processing moved to a GPU or other external CPU when it makes sense, but developers will not do so unless there are libraries that abstract this complexity out for them. Software should be able to dynamically respond to the hardware it is being run on to achieve maximum performance when desired. That's why DirectX has been so successful, cause even when things are not supported natively, many computers can still use software emulation to achieve the same effect (at reduced performance sometimes).

Basically I want the ability to easily throw more hardware at a problem and have it work.