The new CUDA 1.1 SDK includes some new physics demos including particle systems, FFT-based 2D fluids, and n-body gravitational simulation, all running on the GPU.

http://developer.download.nvidia.com/compute/cuda/1.1-Beta/x86_website/Physically-Based_Simulation.html

[youtube RqduA7myZok]

Thanks to Simesgreen for the link