ATI will be demonstrating its physics-on-GPU strategy at the Game Developers Conference I the 26th of March. In a post on Twitter, of all places, AMD's Terry Makedon revealed that a presentation at GDC, entitled "Having Your Cake and Eating it Too: Increasing Game Realism, Scale and Reach," will outline ATI's GPU-physics plans - and possibly even feature a demonstration.
Makedon also clarified that "Havok is indeed our partner of choice." which while unsurprising - it's highly unlikely AMD would be supporting nVidia's PhysX engine - is reassuring. Ever since Havok's purchase by Intel, we've heard precious little about previous plans announced to see the Havok SDK optimised for AMD hardware.
Clearly AMD offering GPU-accelerated support for Havok will put the company even more at odds with nVidia than it is already. An educated guess, looking at the summary of the presentation, would suggest that Havok-on-AMD hardware will work using an OpenCL implementation, so it could, theoretically, be possible to nVidia hardware to implement as well. We'll have to wait and see what happens there.
I, for one, look forward to the full presentation!