there was a nice jenga game done with newton but i can't find it anymore.

newton handles stacks fine but with more than 50 entities (depends on your computer of course) in contact with each other it can get slow (the a6 physics engine already can get slow with 10 entities in a stack though).

here are some examples to play around with:
http://newtondynamics.com/forum/viewtopic.php?t=2193&start=0
http://newtondynamics.com/forum/viewtopic.php?t=2175

the current 3dgs newton plugin is a bit outdated. i still plan to complete and release an up to date version but i am not sure when it will happen.