Full Phys X torsion wont run

#1 Debug exe's aren't shipped with the engine. Torsion projects default to debug. You'll need to either compile a debug exe or change the configuration in Torsion to release.

#2 As a new torque user and being lucky enough to be a new user for 1.2, I fully recommend using the FPS tutorial hidden here which even covers this exact scenario.

It also covers a lot of other first time errors associated with getting started with the torque systems

#3 Also, if you have a PHYSX capable card. But is uncertain if it's actually active (sometimes it's not, even with new drivers installed) You can check if you need to install the physx system drivers by downloading GPU-Z, and see if the physx checkbox is set. If it is not then you must install the system drivers.

Note:
Installing this driver on a system without a PHYSX capable card will not activate the physx checkbox in GPU-Z. I just wanted to make that clear :)

You'll find GPU-Z here:

www.techpowerup.com/gpuz
www.techpowerup.com/downloads

It's a free tool.

Latest PHYSX system drivers are here:

www.nvidia.com/object/physx_system_software.html

Best of luck.