I don't know if anyone is working on this, but I found a nice looking solid bodies engine that might be able to be integrated into blender easily.
It is by dictoon, who also made toxic, and he would donate the sources, and it appears to work quite well and pretty quickly.
Try downloading the demos and running the programs, they are pretty good.
you can check the html files next to the program after it is run to see what kind of things it is doing.
anyway, ignore this if it has already been seen.
it is not accurate, but could be useful
Soft bodies is in tuhopuu i think, and there was a BF build with it in a while ago.
just because the source code is available doesnt mean it will be easy to impliment, nurbana code was given to some blender coders a while ago and nothing has been done. the coders are just busy with other things that they feel are more important in blender then this.
jesterking, sorry i wasnt bitching, i was just using it as an example
I just gave a bit info on the current status