Unfortunately I have no experience with physics and XPAL til now, but if someone (Amos?

) will guide my, I will happily help with this task, since it is part of the terrain 1.0 "roadmap" anyway.
Well, very simple. (No, really).
You should just figure out an efficient way of testing collisions with your terrain.. for now a good beginning would be to have a way to get a list (well, an index list) of triangles likely to collide with a collideable object, given the AABB (Axis-Aligned Bounding Box) of this object.
Can you do that ?