Above video is a demo video of V-REP, the Virtual Robot Experimentation Platform. It is a 3D robot simulator, with integrated development environment, based on a distributed control architecture. Any robot can be modelled and simulated with V-REP.
V-REP supports 2 physics engines (Bullet and ODE), inverse/forward kinematics for any type of mechanism (can work hand-in-hand with the physics engines), collision detection, minimum distance calculation, proximity sensors, camera-like sensors with image processing, path planning, surface cutting simulation, graphing, custom user interfaces, etc.
V-REP is free for students and can be downloaded here: http://www.v-rep.eu