We suspected this, but now it's clear that NVIDIA's end game when it picked up PhysX-maker AGEIA was to integrate physics processors into graphics cards. Right now, they're porting the PhysX engine over to run on GeForce 8s, and it'll be a simple software download, bringing some additional physics-crunching juice to current cards. The next step is a GPU with an onboard specialized physics processor.
For one, AGEIA's standalone PhysX cards haven't really broken into the mainstream computing. Throwing their chips onto NVIDIA's graphics cards would push adoption, and by Nvidia CEO Jen-Hsun Huang's reasoning,
"encourage people to buy even better GPUs. It might—and probably will—encourage people to buy a second GPU for their SLI slot. And for the highest-end gamer, it will encourage them to buy three GPUs. Potentially two for graphics and one for physics, or one for graphics and two for physics."