Is anyone out there working on continuous physics engines? This, like most any physics library I can find, uses the fix-after-intersecting fixed-time-step model, which makes everything act like a stiff sponge, even if you greatly increase the number of iterations per frame.
Carmageddon 2 (as the last example I can think of) instead found out when the next intersection would happen, precisely, moved time forward exactly that far and then resolved the collision using impulses and would then repeat until it reached a frame's worth of time. In pathological cases, this resulted in a frame taking nearly a second, but that was rare and the physics were much less spongey and more realistic.
Carmageddon 2 (as the last example I can think of) instead found out when the next intersection would happen, precisely, moved time forward exactly that far and then resolved the collision using impulses and would then repeat until it reached a frame's worth of time. In pathological cases, this resulted in a frame taking nearly a second, but that was rare and the physics were much less spongey and more realistic.