hehe, people who have never touched programming in their life giving ideas on how to implement networked soft-body collisions i'd rather see multiplayer implemented with no vehicle collisions / no damage first - just something to let us race around with friends with reasonable vehicle physics simulation and vehicle interpolation. i hope the engine can accomodate that, at least.
...., my fps stays a constant 25 as long as i dont go over 4 cars (quad core, each car uses its own core, therefore, 4 cars is my max without fps decrease, besides, if you read my WHOLE, signature, you'd know im upgrading the gpu to a hd 7950 anyway, in which case ill get much better fps, at max settings :/
Make a car of another player as solid object and let each client to calculate everything. Think about what would happend.
LAN as a minimum would work fine. If people are not happy with having to have LAN parties they can always just get Hamachi or any other similar program which would make it in a basic sense online. The only problem then is of course the slight latency created by each persons network and computer, though this is a choice the people going with that option could choose and compared to several other racing games or sims the lag might not be to terrible. Just have to wait and see, but LAN is a must.