Fixed that for you. That's just standard rigid body physics. Nothing special. Pretty much any rigid body physics engine will do, and even then there are more impressive things. Exactly how he auto-generated the collision mesh from the graphical mesh, I'm not sure, but there are various methods (assuming he generates a poly-reduced mesh; he could be using the full mesh, but for high-poly models that's computationally expensive).
Does anyone know how to implement the physics collision at 00:59 in this clip:
@L. Spiro: how costly (CPU-wise) are such animation/physics combinations?