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Correct, it's not doing anything. Even if you could somehow use it for Physx, you wouldn't want to as it's not powerful enough. It may be Intel's best IGP to date, but it's still an IGP and performs like one.
Let's see...considering that IGP performance (all of them) is better than it has been, that's NOT necessarily a Bad Thing.
While IGP performance is not going to take on the high end GPUs of today, that has never been what the IGP market has been about. Integrated graphics (for both portable and desktop computing) is, by design, aimed at the floor (minimum, not maximum).
In fact, look at the IGP players aside from Sandy Bridge - all of them support at least OpenGL 2.0 ES today (non-Windows OSes except for OS X) and DX10. (By the way, that includes the IGP two generations ago out of Intel - G41.)
That means that, once and for all, starting with LGA775, there is no reason to settle for XP-level performance at even the CSM or entry-level portable-computing level.
Lets see... What exactly is your point here?
I said SB IGP is intels Best you said "better than it has been" I said "it's still an IGP and performs like one" you said "IGP performance is not going to take on the high end gpu's of today"
When did I say it's "bad"? or that it doesn't support OpenGL?
What exactly is it that you're disagreeing with?
The on die GPU does do one thing better then any discrete (as far as I know) and that is video transcoding. So it isn't completely useless even if you have a discrete, of course there is no way to leverage this yet on market, but might be soon.