The images of the PhysX card I've seen resemble a low-end PCI graphics card. ASUS has stated they intend on offering boards with the PPU embedded. We may also see future video cards that bundle a gpu with a ppu as part of a complete package.
What's interesting to me about this is that progress used to mean being able to tackle more and more tasks with less; long ago, motherboards had little more than a keyboard port and today, we expect integrated audio, lan. . . But now, we need dual cpus, gpus, dual cores, dual video cards and now a new physics processor.
In the long run, it's worth it for better games. Widespread adoption of the technology, however, won't occur until it becomes somewhat affordable or integrated as an option with existing graphics cards or motherboards.