Ragdoll physics are a type of procedural animation that is often used as a replacement for traditional static death animations. There are two digital toys you can play with: Toy1 and Pictaps. The latter is a painting application where the figures you draw comes alive and start dancing. Here is a nice example of Digg's creator Kevin Rose. Both toys are quite original and made purely for fun!
As for a designer, it should have been a challenge to get the physics right. What use might this technology be? Check out homepage of the firm he currently works under: Defide Inc.
Do you know any other applications or digital toys? Share them in the comments.