The Scrolls of Eithador the Great War is going to use the PhysX engine to do physics which ranges from liquid to cloth. This will allow the banners to be torn and hopefully fully destructible terrain in real time making the world feel even more alive.
Here's a few videos to show you what PhysX can do!
(they do look like there the same links but they aren't)
- Borderlands 2 Gameplay (40seconds onwards shows the most) Geforce.co.uk
- Mafia 2 Footage Geforce.co.uk
- PhysX Homepage Geforce.co.uk