I made a first test with Bullet using a string attached to a prop. It's easy and works well. Here is a "string" prop for your own tests: (simple a long, small tube):

http://adp.spdns.org/String.pp2

Position this prop and something other (I used Posers square primitive, X/Y scaled to 500). Rotate the string 90 degrees and bring one end tight to the square.

Enter Bullet and create a new simulation. Check the square under "Rigid Dynamic" and the string under "Soft Dynamic".

Select the string as the object to work with and create a "Animated Constrain". Move the selection where the string touches the square and "Set Handle". This handle (the little cross) can be found under "Groupings". Set the square as the parent for this constrain (because the string shall follow the square if it is moved).

Select the little brush left to "Set Handle Position". Set the brush to "More constrained" and paint the first row of vertices green (maybe you better hide the square to be able to see what you do).

Check "Live Simulation" and the string should fall down to ground on the not connected end. Grab the square, move it and see the string dancing :)

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