I think you would probably be better off using particles...

The physics (as I concieve them, fastlane you can correct me) works like this:

in the Z dimension there are particles pushed upwards into the air, and gravity accelerates them downward, until they fall down.

In the x and y dimension they have a constant velocity, so that they will move away from the saw. air friction also plays a role, in keeping the sawdust from flying super far away from the saw itself.