Heh, those videos were made by my father, he is currently experimenting with the game a bit.
Yeah, the cogs are just simple rigid bodies. The only difficulty is to align them properly, otherwise they will jam. At first I tried to draw them by hand, but as I figured out that I can't even draw a circle that big I decided to write a function to create them. In the game editor you have the ability to create them via a simple menu. With that functions you can create a lot of different shapes, which is really cool.

I still hope, that parallels or vmware will implement a good DX emulation in the future. With parallels it will run, but the graphics are quite messed. Didn't find someone to test it on vmware, but with bootcamp it runs normally.