Well, the way George made the demo, he basically had the physics objects far enough apart that there would only be really one active at a time, but you could kind of do two at a time, by splitting the time for each entity between two (or more).

Kind of like this, I think:

Frame 1
Entity 1, gets physics, does its thing, releases physics
Entity 2, does nothing, or just uses ent_move

Frame 2
Entity 2, gets physics, does its thing, releases physics
Entity 1, does nothing, or just uses ent_move

Frame 3
Same as frame 1

Basically each entity is under physics control every other frame. This might work for some things, but would fail in some instances (like shooting a would be physics object in the frame that it wasn't under physics control). The more objects that you tried to split the time between, the worse it would be.