Yes Skyline has physics, we are using Bullet as this has a cool vehicle system. PhysX, Havok were considered but Bullet came out on top to fit our plans.
Physics example:
From an empty scene, add a directional light.
Open the physics preset library, library drop down at the top of the preset panel. Choose Physics.
Drag an instance of Bt Ground, Bt Stacked Sphere and move this sphere above the ground.Add the Bt Throw to the scene.
Select in the scene list the stack sphere and open its properties and change the Bullet Stack/Stack height to 10.
Next press the play button and you should see a falling stack of spheres. Press the space bar to shoot at the spheres.
To stop and go back to the scene press the play/stop button again or ESC key.
To see slow motion physics move the scene speed slider in the scene editor tool bar.
I will write up a simple physics tutorial and how to add a ridged body to your mesh, once we get the next release out.
I hope this helps