The Tech Report has some skinny from NVIDIA about their plans for PhysX following their acquisition of AGEIA (story) that were revealed in a Q&A that followed their fourth-quarter financial results conference call. It sounds like speculation that there will be no more dedicated PhysX cards is accurate, but NVIDIA CEO Jen-Hsun Huang says the PhysX engine will be ported to CUDA (Compute Unified Device Architecture) which will allow it to be run on GeForce 8 cards:

We're working toward the physics-engine-to-CUDA port as we speak. And we intend to throw a lot of resources at it. You know, I wouldn't be surprised if it helps our GPU sales even in advance of [the port's completion]. The reason is, [it's] just gonna be a software download. Every single GPU that is CUDA-enabled will be able to run the physics engine when it comes. . . . Every one of our GeForce 8-series GPUs runs CUDA.

Our expectation is that this is gonna 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.