The ZMan:
Think about economics here... though its nice to get things for free how does Ageia as a company keep going if they give everything away.
It looks right now with the PC announcement that like the graphics card people they want to make their money off the hardware and my giving the API away it will encourage game developers to use their API which will hopefully encourage more people to buy the hardware.
So possibly to make extra income (and becuase console users cannot buy a card to upgrade their console) they have chosen to charge on the consoles. Sony decided to cover everyone up front, MS didn't. Maybe if future versions of consoles have PhysX chips (licensed of course from Ageia) built in then the API will be free on there too.
I think as a PC developer you are getting a stunning deal...
I think this is more a matter of perspective. Ageis aren't a stupid company, and their free license deal has quite a few strings that if you don't honour will really bite you in the butt later.
The reason it's free for Playstation 3 developers who have already forked out £50k for their development kit & SDK, is simply because the PhsyX PPU is part of the PS3 hardware. So Ageis make money on every console sold, so the more developers who can add physics for free will, making more gamers want to play these amazing physics based games, meaning more PS3 sales and more money in the pockets of Ageis.
Hardware physics is more than encouraged by limiting or stripping out features that could've easily been done via Software. The performance increase also while not unusual because of using the hardware, is actually greater than it should be. Basically they deliberately cap the software physics, so people will thing "oh man this is slow, maybe I should get a PhsyX PPU" and with titles like Cellfactor showing off what can be done without actually being sold but a freaking technology demo. Well I bet that hasn't hurt hardware sales either. Quite a few underhanded tactics to steal business away from Havok and Renderware who also support hardware physics via Shaders. (so no need to purchase fairly expensive hardware)
This isn't helped by the alluring factor of costs if this hardware solution is supported, to Ageis specifications (and believe me they check every damn step of the way before allowing you to continue). In the end it's just not worth bothering with.
If you want a free Phsyics engine, then use ODE, Newton Game Dynamics, or MonkeyPhysics.
Otherwise Renderware:Physics and Havok are possibly the best professional solutions.
I think both Ageis and Sony have made big gambles recently, honestly don't see them seeing the big pay-off from it they were hoping for.