Softbodies are available as an effect in the Object buttons.

"Dynamic" Mode evaluates collision, gravity, physics etc.



----------------------- Dynamic Mode ---------------------

NOTES:

 - This is an incremental simulation. Unless baked, the simulation can
   only work forwards, i.e. with increasing frame numbers (i.e. in
   ALT-A). If you want to step through the simulation freely, you
   have to "Bake" it (see below).

 - Known issue: Doesn't work correctly with fields nor MBlur
 

HOWTO:

 - Create your soft mesh, for example, a plane. Subdivide it a couple
   of times. You can subdivide differently in different areas. The more
   subdivision, the 'stiffer' the mesh in that area.
   
 - To evaluate lighting correctly in OpenGL view, turn on Subsurf
 
 - Create a new Object, on which deformation will be based. For example,
   a table where a tissue falls down. 
   
   This object does not need to be subdivided.
   
 - It is good practice to create two versions of this object, one slightly
   bigger and invisible, which is used for collision evaluation. This corrects 
   for collision inaccuracies. It can also be lower-poly than the visible
   object, to speed up simulation.
   
 - Add an effect to the soft mesh, choose "Soft", set to "Dynamic". In the
   DeformOb: field, enter the name of the other (rigid) object (if you have 
   created two, use the bigger one).
   
 - Sta: and End: set the frames where to begin/end evaluation/baking. Set
   to 2 and 5000 for now.
   
 - Gravity is self-explanatory. Set to 10 for now.
 
 - Stiffness and density of the soft mesh directly depend on each other.
   Set to 2.7 for now.
   
 - Elasticity is how much the soft mesh's material can strech. Very low
   values appearently lead to rounding errors and strange behaviour, is
   to be investigated. Set to 0.03 for now.
   
 - MoveDamp is how much the movement of the soft mesh is damped along time
   (for example, by air friction). Set to 0.6.
   
 - "Mass" toggles physically (more or less) correct simulation vs.
   a very simple algorithm. Set it to On.
   
 - "Restitution" enables bouncing of the soft mesh from the rigid object.
   Not wanted for our example, here, leave Off.
   
 - "Ext Coll" enables detecting movement and rotation of the Rigid object
   during animation. If you leave this off, the simulation will be faster.
  
 - "Collision Dist" is the distance a vertex in the soft mesh will be moved 
   away from the rigid body when it collides.
   
 - The "Restitution" slider determines the amount of "bouncyness".
 
 - "Freeze" makes a new object from the current state of the soft mesh
 
 - "Bake" runs the simulation and permanently stores it into the soft mesh,
   so that it can be played at full speed, and backwards. Use "Unbake" to
   run a new simulation.
   
 - Try ALT-A to see if it works :)
 


------------------------------- Field Mode ----------------------

In Field mode, the soft mesh behaves much like a Metaball. 


NOTES:

 - Due to the new displist system in recent Blender versions, this only
   works during ALT-A. It used to work during transform also.
   To be fixed.
   
 - The "Falloff" buttons (No Falloff, Sharp, Smooth) are not yet
   implemented in the new displist system, they don't work.
   
 - More documentation to be written. Just try around a bit - it's
   not hard to find usable settings.
   
 - Heavily depends on both mesh's normals.


------------------------------ Collision Mode --------------------

Stupid, doesn't really make sense.