hi,
Recently I have been discussing the Blender Destructability Editor with it’s dev Scorpion81.
To give a short overview, it uses, with permissions, code fron the fracture addon & custom code combined to create destructable objects in the bge.
I find it really fun! Shooting mesh to peices in the bge really rocks my boat 
It does a lot more & I’m not bge aware enough to properly test.
You can find the code on Git Hub: Blender Destructability Editor
Not all features are fully solved, that’s where we need feedback & some support from the community & blender devs.
Installation,:
To use the fullest working version there’s a one line patch to bpy_types.py
read the read me, you can just manually add the line to bpy_types.py or use the pre-patched bpy_types.py file in the download.
The handlerAndKnife.patch file is needed for the knife function, but the addon works without it also.
Add the folder “Object_Destruction” to your addons folder.
enable the script in user preferences > addons > object
then find the gui in the object properties.
thanks, your feedback is most welcome to make this script to Blender release.
also, it’s planned to have the script bmesh ready for 2.63.