Age of Conan is the first PC game ever to have PhysX-powered server-side game physics. Funcom reports that the change results in "more than a doubling in the speed-of in-game physics processing" versus the normal method where PhysX is on the game's client software.
Funcom has also improved a number of other visual aspects of the Age of Conan graphics engine. You can see a narrated trailer showing off and explaining those new visual effects after the jump:
Gallery: Age of Conan Screenshots