It all looks fine to me from the video.

OMG... Are you serious? How can't you see that wheels don't move on surface smoothly, they simply jump on the top of the higher surface!!!
It moves smoothly from higher surface back to the ground one! Am I the only one who faced that problem!?

If I drive up a curbstone with my car thats pretty much how it behaves.

I drove up a curbstone with my car and this is what happened : http://dl.dropbox.com/u/4979264/kaza.jpg

I think it looks pretty good, too, but here's a workaround:
Make wheels invisible, create visible but passable copies. Now set the position of the visible tires as follows:

vec_set(invisible.pan,visible.pan);
invisible.x = visible.x;
invisible.y = visible.y;
if(invisible.z > visible.z) invisible.z = visible.z; // high to low surface works smoothly
else invisible.z += (visible.z-invisible.z)*time_step;

OK... I gave up, as I see you aren't interested in helping out... Just posting silly jokes around... That behavior isn't realistic, I know that all physical engines aren't perfect, but such behavior isn't acceptable! And this isn't physX problem or bug, you won't see anything similar in UNITY or UDK... This is problem with implementation of it in GS! I've made clear video which shows how wheels are jerking up, that will never happens with ODE, and you'll never see such behavior in other game engines which are using physX, I wonder why?! But OK leave it as it is if it's good enough for you guys. But I still don't see any reason to make high poly race track to make movement smooth and to update vehicles tilt and roll smoothly and realistic, not as if I used trace to get normals and then just simply change tilt and roll of model, at least thats how it looks at the moment... I wonder who even tried to run demo I've posted above... I'm pretty sure none of you did.

EDIT: Superku thank you for trying to help. At least someone tried to help.

I actually did run the demo, open up gta4 and get near slowly to a pavement and same thing happens.

Also check what happens on the Visual Debugger. I understand your point but you are looking for solution on the wrong place, it does not really look like an implementation bug, and as a lot people said that's what most expect from the physx. you can always smooth between the values you get from physx engine as superku stated. (actually you SHOULD do it for physx objects with critical impact on gameplay, because sudden FPS drops/jumps can result in physx doing crazy things.)

3run: I think you just have somehow the wrong approach. You're permanently complaining about problems in your game and expect that other people fix that for you. Instead you should just learn to use your tools.

All raycast cars determine the ground distances by casting rays from the wheel centers to the ground. The wheel will move upwards immediately when its center goes over a 90 degrees border, because then the distance changes suddenly. This is just logical and has nothing to do with a "bug". You can see this in hundreds of games. In a few games you won't see this because they don't use raycast cars or the level designer has hidden that effect with a solution as suggested by Superku.

Either be content with the current solution, or go and learn and improve it. With merely complaining you won't achieve anything.

i don't know about physx but other physics engines like newton and bullet can cast rays with any of the supported convex collision shapes. not just as an actual ray without any thickness. this way the problem can be avoided but of course this also takes more performance.

Why not making shapes for rays? Or is it same problem with PhysX?