I personally think that the physics in games are hugely underrated. Everyone seems to be constantly lusting after the latest in realistic graphics - but physics engines often take a bit of a back seat.
I find this a shame - an enormous amount of work goes into creating these engines and physics really can make or break a game just as much as graphics can. The difference in physics is that people subconsciously expect these sorts of things to work the same as they do in real life, because that's "just what happens."
Well now folks we've got a new physics engine on the seen - Lagoa multiphysics. I'm not sure when physics like this will make it into mainstream games, the CPU power required must be pretty immense. But still, the demos they've got up there are pretty damn impressive. Best physics engine I've seen yet by far (including PhysX!)
As a side note I'll be writing a physics engine next year as my final year project. It'll be a tough one and we obviously won't get anywhere near the demos above, but I'm hoping we can pull off something pretty decent!