NVIDIA has announced a christmas present with the release of PhysX SDK 4.0 later this month, open sourced under the 3-clause BSD license. The big technical change in the physics engine appears to be the temporal Gauss-Seidel solver, enabling faster and more robust handling of contact points and constraints.
For full details, please see https://news.developer.nvidia.com/announcing-physx-sdk-4-0-an-open-source-physics-engine/