I really don't think it will be exclusive, this is on of the biggest marketing fails you can possibly make. Almost half the players would be simply put away. What might be possible though is that it will run worse on ATI/Nvidia graphic cards.

the battle will be big: i imagine a lot of player will find the need to minimize explosion and similar effect.

It isn't that it isn't programmed to work with it ATI it just doesn't want to. PhysX can run off your gpu but it doesn't. You won't have a problem if it wasn't running off your cpu.

I'm not all that technical with hardware. I was just saying that whatever it is, it doesn't work. We're basically in agreement.

Too early to call, but I'd love to see some nvidia love :3

There is no decision made for an exclusive deal with either graphics card company. Might change some time - but besides that. PhysX is just calculations, done right, it won't slow down the PC, e.g. when you do it in a separate thread (utilizing multi-core cpus). If a game slows down the PC when you are using ATI cards, that's not because of the ATI card, thats just poorly supported PhysX code.
Anyway to get to the point, we are thinking about using a physics library to support our game and get more performance, but even if we will use PhysX we will make sure that it's supported well.

There are 2 separate things we want to consider:

1. physical calculations on the server; this means we need to be very fast and low on performance; servers don't have high end graphics cards (if any) so they cannot make use of any PhysX hardware out there. This will be used for basic stuff, like collision detection, raycasting, gameplay verification.
2. physical calculations on the client; this is mostly cosmetic stuff, or stuff to pre-calculate before it is sent to the server to verify it, for making gameplay feel more 'snappy'. this part we will make definitely so that it supports all PCs in the min spec and if there will be a lot of cosmetic stuff, it will be possible to turn it off.

Well that's good to know. Well then if you can do it right, bring it on!

LOD system will be implemented for particles VFX based on distance , it would also be possible to have quality settings push the particles system into the secondary/tertiary LOD right of the bat from the graphic setting and give a break to our brothers who have lower end war machines. With the latest direct X lots of computations can be thrown to the GPU in order to keep the cpu on the important stuf. We are evaluating third parties particles system that take advantage of these DirectX features.

So in short particles amount could be controlled by a High/Med/Low option that would overide the LOD on your client

Physx? Please no. That technology is a major resource hog and is highly unreliable in most iterations. I'm afraid I don't even believe it CAN be implemented correctly any more. Even when Planetside 2 had actual Nvidia representatives/programmers work with them to implement Physx it STILL had to be removed and was considered a failure because it was found to be at fault for multiple crashes and memory leaks despite input from people who are supposed to be specialists on the subject. Might as well use TressFX while you're at it.