From Diablo Wiki
Havok Tools make up a portion of what will feature the Blizzard game engine that powers StarCraft II and Diablo III. StarCraft II and Diablo III features physics emulation is made possible through the licensed Havok software, which means to basically take the world environment and building it up with techniques that appear to give it weight, density, momentum, gravity, and friction; with the ultimate aim to make the game look more realistic. While the physics are artificial representations, it can achieve brilliant effects (if not occasionally strange due to improper and simplified translation of real-world physics into Havok).
One of the positive effects of using Havok is that corpses fly about when killed, and the environment can be made destructible.