Yes, it is. NO IT ISNT! - But it could be a bit tricky for multiplayer, though, since in a PhysX environment you don't "set" player positions, you have to move them via forces and doing that in a proper way in a multiplayer environment could be... complicated.

But that is not a particular PhysX issue, nor a Gamestudio one, this is a general problem you encounter when you use a physics solver. But I bet that there are already best practices and patterns for that in the game dev community, try to search for it.