GDC '06 the outcome (Physics)
- The Physics for game developers tutorial
Erin Catto had a nice new simple implementation based on Sequential Impulses.
Crister's session about floating point problems was very important (and his book is exceptionally good too)
Gino's 4D sweep is interesting.
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Of course Havok's and Ageia's hardware accelerated demos were deliberately staggering, but what really got my breath away in the realm of game physics was Natural Motion's Endorphin.
I really think they are leading the future for character animation in physics controlled environments. (ahem ... ) what I mean is :) that this might very well be the next big thing in the games world. And as far as I know, nobody else does it (with Dynamic Motion Synthesis)
For Natural Motion I raise my hat.
Ahmed El Deeb