I don't think they will take off, until the physics processors are integrated on to video cards. Most people won't want to go through the hassle of buying two separate cards that eat up their expansion slots, when they could be combined into one.

Of course, that would drive up the price of the video cards, though. And they're already sky high as it is.

And some videos!
http://www.airtightgames.com/currentproject.html
And other tidbits:
http://personal.inet.fi/atk/kjh2348fs/ageia_physx.html
I think there's some very cool potential with this technology. There's some great stuff going on in those videos. I'd buy one if games were to take good advantage of it.

More videos, linked from the personal.inet site. Some good/some not as good: http://www.ageia.com/press/press4.html. For some reason a few of the videos are EXE files, but they seem to run okay after downloading. Not sure why a video would be EXE, but oh well! :P

EDIT: Sweet! Check this out. It's fun, if nothing else...
Just a few moments ago I found this neat interactive demo. I'm easily amused, so this is cool. I'm throwing balls at a Jenga tower and at a dead creature, watching some ragdoll effects. I'd recommend it to anyone who's easily amused; there seem to be a lot of little interactive demo pieces in this little file you install:
http://www.novodex.com/rocket/NovodexRocket_V1_1.exe - NovodexRocket_V1_1.exe - Interactive physics demo from September 2004, 15.6MB

And I figured out you can right-click an object and toss it around