Quote: "I don't see physx really making an impact, since nvidia and ati are going to challenge with their own ppu's."
Nvidia are going down the Havok FX route, but it isn't a dedicated physics processing unit at all (certainly not in the way of the PhysX board), and cannot be used in the same manner. It is what's known as a 'cosmetic' system, more of a SM3 enhancer, and cannot be used for actual physics calculations.
Edit: Before anyone dives on me and shouts 'load of crap!' let me clarify - the Havok FX system cannot directly effect the gameplay. I.e. the physics calculations it does are for display purposes, and are not fed back into the game world in any way. Think of it more as a 'shader model 3 accelerator on steroids'.
The reason why I think PhysX will win over Havok FX? The cost of the SDK. Free vs. a 6 digit license fee. That is the kind of difference that appeals to all spectrums of developer, not just the indies. Free = much wider adoption, wider adoption = it being more usual to have PhysX support, hence it gets the brand out there.
I don't believe that any of the current PhysX games are showcase enough to convince people, but there are enough powerful engines coming to change that. Over 100 games in dev that support it, the Unreal Engine 2007 supporting it natively. The fight hasn't even begun yet.
Quote: "They just don't have the bankroll to fight nvidia."
nvidia are big, yes. But they aren't making any physics processors, at all. The question should be, do they have the bankroll to fight Havok? With $60 million funding from the start, I'd say so.
Bite my shiny metal ass