I just had an idea:
Since we are animating the karts, we are adding controls to the characters (controls to move arms, legs, etc.). Why not let those controls be controlled by the physics engine?
For instance: when a kart falls, the control that are marked as "Physics Controls" go up, and when the land the move down.
You need to define the amplitude for each "physics control" (Keep it simple: an acceleration of x g = a movement of y cm)
Possible snag: Can this be done without disrupting the IPO animation?
Is this the way to go? Is this easy to accomplish?