Oleg's team had a tech demo of their own physics engine back in 2005. If I recall the reports they had barrels being knocked by blast waves and then rolling into wire fences and bouncing off of them (the wires acting like elastics). I doubt we'll see this type of detail in CoD, but I bet the engine can handle it.
It would be interesting to find out if there are real technical barriers to offloading physics calculations to the GPU, given that Oleg is using his own physics engine.
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