I'll answer as best I can, but Im no physics guru.
1) I have seen in other posts thats there is some form of virtual bounding box in lite-c to minimise resource requirements.
I think your blocks may be hitting that. It seems this 'box' is based on object placement, but not size. So your 'plain'
may be sticking out the sides without forcing it to expand. Put the following code into main before the loop and see if it helps.
It did weird things to mine but I may be using badly sized models.
// create universe boundaries
ent_create("cube.x",vector( 500000, 500000,0),NULL);
ent_create("cube.x",vector( 500000,-500000,0),NULL);
ent_create("cube.x",vector(-500000, 500000,0),NULL);
ent_create("cube.x",vector(-500000,-500000,0),NULL);2) I think you are half right about your phisics going splat, but not cause the this mysterious box.
I think its just too many boxes overlapping each other causing it to go schitzo.
3) Complex question here, but I would suggest looking at some "particle" tutorials because thats exactly how they
are forced behave often, and they be able to explain better than I best way to do this. (Each entity will take care of itself)
Best of luck
