im pretty sure what additive weapon velocity is, but newtonian dampening, im assuming is glide physics. so will setting it force glide physics at all times or does it do something else?
Newtonian Dampening changes turning behavior. By default, there's quite a bit of slide when you turn, and when combined with high damp values (such as in BtRL), you can actually push your speed up beyond the max. Newtonian Dampening is the more realistic turns, where to much turning will lower your speed. Backslash can explain it in more detail.
A good explanation, Turey. It's what people see, but from the code's perspective, it's kind of inside out 
Basically, retail FS2 applies damp to ship's X and Y speeds but does NOT apply it to Z. As a result ships are only bound by their engine, how fast it goes up to max and down to min. When you're going at full speed, the 'slide' pushing your speed beyond the max is because there is NO damping on Z and the game puts you instantaneously at full speed in the direction you're facing, while obeying the proper rules for X&Y. This discrepancy snowballs until the speed difference is quite noticable.
I bet someone at :v:olition created the damping physics system, and then someone else couldn't figure out why the engines weren't accelerating at the speed specified in their table, and then hacked the damping system to compensate. Frankly, I wish it was standard for all three axes by default -- it's pretty hacky how they deal with all the 'exceptions' like coming out of subspace, or being dead, or having engines disabled, or being debris/asteroids, etc...
Long story short: with '$use newtonian damping' on and a high damp, you approach full newtonian physics. I think all mods that want decent $damp should use this flag -- only reason we had to turn it into a flag is because it affects retail mission timing (what! oh no! ships retaining momentum as they exit subspace?
)
p.s. Oh and hi everyone -- had some major hardware troubles, but I'm back now! 
I just quoted some of this into the wiki. Would have properly referenced this post, but it seems that the < ref > tags are disabled on FS Wiki.