Physics calculations are currently being done by the cpu. The new PPU, PhysX, from Aegia moves this to a separate card, which should free up the cpu to give you better AI and more. The gpu has currently nothing to do with physics. But nvidia recently showcased how they could run physics on their latest cards, and Havok is making a module available to their Havok Physics Engine which allows developers to put some of the physics onto the gpu. This is better than using the cpu, due to the nature of physics calculations (somewhat similar to graphics calculations). However, it will only be interesting in cases where the game is cpu-bound, since you'd otherwise loose fps. Or if the IHV's can figure out a way to utilise unused parts of the gpu, even when the game isn't cpu-bound.
Personally, I'd much rather have a dedicated PPU than a GPU & PPU in one chip. (if they add a ppu to the graphics card, that's another matter).
You will not need any special kind of motherboard to use a PPU. It will either use a PCI or PCI-Express connector, which you have on your current motherboard.
As for compatibility, the games will have to be coded to make full use of the PPU (Physics Processing Unit), but it could be that some of the older games can make use of it, if the drivers are smart enough to "steal" the code from the cpu. However, this has not been said to happen, so I wouldn't expect it. There are quite a few new games who will support the PPU.
Take a look
here and check under products/games to see some of the games that will/already supports the PhysX...
