Check that out, very interesting. It's soft-body physics that you might know from Rigs of Rods, now even better in CryEngine3.
Anything can be built in the Beam physics system - cars, trucks, planes, boats, trains, cranes, tanks, helicopters, and even destructible map objects and crash test dummies. It's all real physics. Anything is possible.
This is still an early work in progress - don't mind the shading and collision issues, they're working on it. Thanks Outrance for posting.
