Another awesome physics demo by Phymec. You can also grab the .blend and try it yourself!
Sorry, really bad screen capture frame rate (running on same PC) on my 4 year old home PC: i7 920 + ATI 4890. Demo runs smoothly at 60 fps otherwise; you do need a good graphics card to enable ambient occlusion and depth of field. Keep in mind: nothing is baked in this demo, it's all real-time.
I nuked the audio; you have to guess what I was saying. 'Yay, Horsey!' doesn't count.
Tip: to add more wood links, duplicate them (linked).
This started out as my two cents into the discussion about constraints in Blender. I've had an issue with constraints in Blender and only recently figured out how to work around it. The main issue: Blender constraints expect objects to always be in their 'home' positions, which is often not desirable or even possible. The work around (for BGE anyhow): at simulation start temporarily place each pair exactly in their relative 'home' positions, then create constraints, and then place them back where they belong.
I'm sharing this simple example with code; yes, sorry, just an example, not an all-purpose.
While creating this example I ended up putting together this scene, named 'Studio Physics Demo' because of the pseudo photography studio lighting. Thanks to Martins Upitis for the GL shaders, Oliver Wolfson for light images; and everyone else involved.