FastLSM is a method for soft body simulation - makes it possible to calculate tons of colliding soft bodies in real time, sounds like a perfect algorithm for computer games. They have a nice video on their webiste which shows what it does.
A lot of people have mailed me a link to this - thanks - because they are obviously using
Irrlicht in their demo. But after I downloaded the demo, it wonder how they are using it: The demo is incredible slow on my pc and the archive contains dlls like glut, glew, zlib, devil, sdl and similar, libraries which are all completely unnecessary if you are using Irrlicht. But I'm now really too lazy to analyze the binary, there is no source included. Anyway, nice they are using Irrlicht for their demo.