New physics doesn't work well with a lot of objects

After making a new .cap with a few walls and spawning a small 10x10 object every frame, the simulation 'collapes' and freezes after about 500 objects are made, and starts shaking after about 200. What's more, the simulation won't stay still after enough have been made, as they continually settle. Objects also overlap each other a lot. Thoughts?

Edit: It might be a framerate issue, because after about 100-200 objects, the framerate drops below vsync rate.

Edit 2: Definitely at least partially a framerate issue. Try running the .cap with a fixed framerate of 30 fps - even one square on screen jitters.

Hmm.. wierd. Everything collapses after a while.

There's also a bug I noticed - try clicking sprite and then properties>Make 1:1. Then rerun and fill the screen halfway with blocks. At that point start clicking the mouse - upon each click, any blocks that are where the first block started, about the middle left of the screen, from 'jump' away from that spot.

Hmm I think its due to the strength of gravity...physics simulations dont seem to like objects to fall at realistic speeds. Later I'll try this example in newton and see if it's stable.