Wrong.

PhysX usually does not take away any physics from the CPU, in most games it adds physics that are nonexistant if the game uses only the CPU for physics(because a modern high-end graphics card would beat even your i7 in physics calculations), with your 9500GT you should probably disable it. From a topic I saw in a german hardware forum, the 9500GT was the lowest card they recommended as a second card for physics only, making it calculate both graphics and physics should cause quite a performance hit.
I'd just take fraps and try with and without it if I were you.