Unreal Development Kit January beta includes PhysX support for iOS
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Epic has released the updated January 2011 UDK beta, and the latest version includes PhysX support for iOS.
According to the developer notes, PhysX is now enabled for iOS development, there's a new Colorize post process, the editor now has a mesh selection preview, and the Bink player has been upgraded to version 1.99a.
Of course, there's more to it than what we've listed here, so head on through here for the full release notes.
You can also download the latest free version of UDK through here.