200.000 moving objects can be calculated on the CPU, but it would be VERY slow. Newton as already trouble with 200-300 moving and colliding objects. And then I'm talking about 1 room. If you want to test where the object is, what it collides with etc, you can't preform that on today's default desktop pc's. even with a quad core you still have not enough power. Thats why Havok uses the video card and Agiea uses its own hardware.

However you could give it a try, but I'm sure its slow.