From my understanding of it, "low" is the equivalent of "off" in most other games. When I looked into it as I originally wanted to play the game on my notebook, it seemed that the general consensus was that turning it low turned off all the extra physX effects, leaving only the base physics and particle effects. The developers titled this "low" because it still used the physX language (or whatever) to display these effects, rather than an alternative physics engine. Conversely, games like the Arkham games do the same thing, but title the setting to "off" because it's turning all the extra enhancements off, yet it's still running in CUDA or on your CPU depending on which card/driver setting you're using.
I remember reading that setting the physX value to zero in the .ini had the same result as the default for low, which was 8 or something like that. I have no idea what that actually really means though.
Either way, the game seems a tad bit drawn out.
