I don't think this is possible, Sadly, As that is almost 1,000 models, Props, And whatever else to render at a certain speed and velocity. LFS can just barely do the cars without a big amount of lag spikes, I don't think without a major netcode update, And at least a uninterrupted broadband connection, Could it even be possible.
Sadly, I own nvidia, So I tend to forget the ATi's.. And so forth, My apologies.
But I was just tossing out a name of a "good" Physics engine, I was hoping someone would toss out a better, generalized name, Which you did! The great thing about "Eye candy" Is that most of it you can turn off, And most is common sense, Lets for instance put LFS graphics above.. I don't know, Crysis. Do you really need shadows on every piece of grass? Which is what I was hoping could maybe be implemented, Maybe like you said, The car (What we see) Is really just a heavy, Thick cloth. It could get ripped and torn, Maybe the game would need a restart before all this to be started, However, Like in GTA IV, You wouldn't see a car on the other end of blackwood wrap around a pole, It would just use the "default" Crash system, Since there is no real way to accurately sync up a crash far away, As well as taking precious resources from the CPU/GPU. Or maybe every car would have s simple "Health" Mode, Where parts of cars have health.Of course, We are thinking outside in, And we might be overthinking it, But this could also help in the tire physics way of thing (Maybe?) Having the tire in more 'sectors', However, Look how long the realistic tire physics are taking, Which is sad, But I'm pretty sure when we see a bad car crash in a race, Most of us are like "Oh shit" Or something similar, I don't think anyone would accurately try to calculate the physical properties of the hood deforming into about 500 extra pixels. There is a line for "realism" And a line for "fun" To realistic and sometimes it can dampen your fun, However, A car randomly glitching through cars, is crying tears of laughter, And maybe LFS does in a sense need to "Calm down" On the extreme realism part of LFS.
Of course, With this technology, You'd have some people saying "Well, Wow, LFS was made by three people, It's not a company, you noob" However, Change is good.
I'd hope to see maybe some official input from scawen, When dinner has been cooked, Had made love night before, Kids are in bed, Wife is quiet. Maybe we could have some input.