So right now newton physics and cloth don't really play nice together. I've been fiddling around a tiny bit to see how this could be "faked" to some degree. Here's my plan when I get a chance, or maybe some of you want to try it out.
This could be as simple or complex as needed. The idea is using small newton objects (static with action). These objects will have path constraints to the cloth mesh. See where this is going? These "proxy" cloth thingies will interact with other newton objects. Where it gets complicated is how many would you need? In a perfect world you would want one for each grid in the cloth. That will be my starting point for a test, a small cloth grid and bunches of small models path constrained to the cloth mesh.
So "static with action" would work with the cloth effecting newton objects; keeping things in a cloth bag for instance. Each object would be assigned a cloth deflector which would cause the cloth to move and also the cloth newton objects to effect the other newton objects. It gets a bit fuzzy in my head till I test it out.
What about newton effecting the cloth? Trickier I think. So now we put bones on the cloth. The bones are constrained to the newton cloth "proxies" (instead of path constraints). The newton cloth thingies will now interact freely with other newton objects. How will the cloth behave? Will it be able to act on it's own normally if nothing is hitting it?
Tests to come.
If I am way behind on this... if you guys know of something I don't like please let me know.