the drunk sumo wrestling looks very funny.
but i agree that for a contest like this it would be way too hard to do procedural creatures which learn how to move on their own. i think usually this is stuff very talented computer science students do for their thesis projects.
http://wiki.slembcke.net/main/published/Chipmunkchipmunk seems to be a 2d-physics engine written in c. so it should be usable with lite-c? there even is a similar crayon game done with it.
EDIT: i took a quick look at the chipmunk source. it uses some non lite-c compatible c features. so either you would have to adapt it a bit for lite-c (the source code only is about 120kb so it should be doable) or you would have to compile and use a chipmunk dll. i am not sure about what would be less effort.
there also is box2d but i am not sure if it is c++ only or if there already is some c-wrapper.
newton can be used for 2d-physics too with a 2d-constraint. but probably it's a bit wasteful performance-wise to use 3d-physics engines for 2d-physics.
