Somebody should put this on the App Store with 10 textures for $0.99 and extras if you buy more. It would sell like crazy.
I think this is only really novel to technical users looking through a lens of tech, though of course I think it's incredibly novel too. But addictive video games already do very realistic stuff around hair, cloth, and all sorts of things, and your average game player will rip the cloth and move back to Angry Birds.
I agree it's really cool, and I Facebooked this, but a cool animation a game does not make.
In other words, it clearly surpasses the vast majority of games in the app store.
This is slashdot's review of the iPod. It's a great example of techies completly under judging a new product