At 3:00 you show the gradual transfer of energy and momentum. Cool. But uhh... Is that really how things would happen in real life? Would the planet really keep bouncing around Earth like that?
Nope. That is not how it would happen. There are several issues with this. One is that the force opposing sliding, which is also imparting torque, is disabled pending bug fixing. With this force you would see the mars dig down a little, lose much more velocity and start rotating (tilting forward). Another is that the planets remain spheres.
We consider three modes of collision in the same simulation framework, which are instant combine collisions, for things which are out of sight or which happen too fast to notice, gradual collisions for things you do see, but perhaps don't have up right in front of you and then SPH for things you really care about watching.
A more realistic, and somewhat unexciting, example is seen in these two videos.
Please do keep in mind that videos posted by us are generally in response to interest in seeing the current state of development, a little before you can see it yourself in the next release. They do not represent the final product, but only a step on the road.
Comments and questions are very welcome. Just expect the general answer to be "we know, and we plan to handle it in due time". ;-)
http://youtu.be/9w1din9uV68and in the end
http://youtu.be/-rYWl2Wb7v4