I don't think the physics calculations change apart from having to simulate less cars in low-res physics if the multiplayer draw distance is very low.
Higher graphics detail means more, and more detailed, objects drawn. That means the CPU needs to do more graphics state changes (switch materials, vertex buffers, blending and so on) and also issue more draw calls to the graphics card. This all happens in the graphics driver where it is queued up until the graphics card is ready to handle it. That, of course, increases CPU load (quite significantly).
EDIT: Heh, just noticed this thread was brought back from the dead...