They seem to be using both havok physics and the havok behaviour, this basically allows actors to dynamically be affected by physics interactions... while still alive and being controlled by an animation. Unlike Oblivion/F3 when actors only had ragdoll physics interaction with the world when they weren't controled by an anim, ie they were dead.
Any other havok product is unconfirmed, ie havok cloth etc.
Sounds great.
RadHamster had an interest in this about two and a half years ago... I saw it and certainly saw why it would be interesting.
http://www.youtube.com/watch?v=xXDZZt7TEAo
Myself, I was very interested in this one here.
http://www.youtube.com/watch?v=I1P_B65XW4I