Bullet is a 3D Collision Detection and Rigid Body Dynamics Library for games and animation.
Free for commercial use, including Playstation 3, open source under the ZLib License.
Discrete and continuous collision detection, integrated into Blender 3D, and COLLADA 1.4 Physics import. 

See the Bullet_User_Manual.pdf for more info and visit the Bullet Physics Forum at
http://bulletphysics.com