Over at DailyTech they've got information
on yet another denial from Microsoft that they will be including a physics api in DirectX 10. This is the second denial so I'm guessing that they really aren't putting it in the upcoming version of Direct X. While not unexpected it is a bit disappointing given the current fragmented in games physics market between Havok, Ageia, and other physics engines. I'm guessing it will be something that we see in Direct X 11 which is a few years off.