Does Irrlicht have good physics simulation? I saw it has collision detection but can it animate objects so they fall over, bump into each other and stuff like that?
If it doesn't, can you use a physics engine like bullet in addition to Irrlicht, possibly without losing portability and performance?
Irrlicht is just a 3D Engine and thus does not include Physics engine out of the box. However, there are many wrappers for Bullet, Physx, Havok and other physics engines for Irrlicht. You might have to include these addons to put together irrlicht and the physics engine of your choice.