From LightWiki

General Guidelines

• ALWAYS let Lightwave do the least possible work in dynamics while still looking convincing. The less time Lightwave takes to calculate a dynamics solution, the more time you can take to tweak settings for better results.
• Use the lowest form of collision (if at all). If you don't need collision to make something look convincing, don't use it. If your object is a ball, try using the Sphere collision type instead of the object type.
• Use proxy objects. If you want to use full collision on an object of a few thousand polygons, that's not too bad, but tens or hundreds of thousands should be avoided, and professionals will always try to use proxy objects in those situations. These are low poly objects of the general shape of the high polygon objects. You might have a heavily-detailed shirt, with buckles and other pieces, when all you need to do the simulation is a basic shirt shape.
• Use Metalink and HardLink. These are key plug-ins to allow you to apply the calculations you've done on low polygon objects to high polygon objects for rendering.
• Combine FX. It's sometimes useful to layer FX on top of each other, such as adding ClothFX to a HardFX object, so it wobbles around a central mass, or allows you to do more complex effects like having a solid object resting in a cloth object(whereas other packages would only be able to do a cloth draped over a hard object).

FX types

You can add these either by going to the Dynamics> Dynamics objects menu, or selecting a Mesh or Null and opening the Object Properties Panel>Dynamics>Add Dynamic button.

ClothFX
This is mainly used for doing cloth type dynamics, though it's settings are flexible enough to do more rubbery/rigid type motions.

SoftFX
This is mainly used for rubbery dynamics. Its collision isn't as good as cloth, but it has settings to allow you to do close fitted clothes as well.

HardFX
This is for brick walls, cat flaps, and other rigid objects.

ParticleFX
This is useful for rain, blood splatters and those kind of effects, especially in conjunction with Hypervoxels.

CollisionFX
This allows non dynamically animated objects to collide with dynamically animated objects. It can also be combined with dynamics for more complex effects.

WindFX
This has a wide variety of useful types for affecting the motion of dynamic objects or particles.

GravityFX
Similarly with this FX.

Other Tools

FXBrowser
This automatically opens the dynamics panel when you select a dynamics object, and also displays a progress bar when a calculation is in progress, as well as allowing you to choose some further options.

FXLinker and FXDynamics Linker
These are used to make items follow particles, like a flock of birds or bees.

FXMotion
This is used to make items animate using dynamics, without the complexities or power of the other dynamics, as one solid object.

Metalink and Metalink Morph
Hardlink
These allow you to make a high polygon object follow a low polygon object's motion. Hardlink does it in the nature of chain mail, keeping every object rigid, whilst metalink interpolates, thus useful for applying a low polygon shirt's motion to a more complex detailed shirt.

FX File Tab
Each FX has a File Tab, with common options. These are listed here.

EditFX
Once an FX has been simulated, you can modify the result with this tab. Since the commands are common to most FX, they are grouped together here.