Raj,

I posted this in another thread, but it's highly applicable here as well. We want to focus on the overall experience that a gamer would get, playing your demo on the target system. If you don't enjoy flexing your middleware building muscle, then use an off the shelf engine or lib(as long as you have the rights to use it and redistribute the executable created). I would guess that when the judges look at the "Best Use of Game Physics" they're going to be looking at overall impression and fun factor not just physics realism. So put in the creativity and get your demo submitted!

~Mitch