Although Kwik will automatically setup the physics environment for you, if you decide not to do it (or simply forget to do it), it is a better idea to set it by yourself.
When selecting the Physics Environment, the following window opens:
The Gravity fields set the way objects will interact with the environment. Gravity X sets the horizontal gravity, while Gravity Y sets the vertical gravity. The default is 0 for X and 9.8 (same as real gravity, meaning all bodies will fall from top to bottom) for Y.
Scale sets the reference of the virtual elements with their proxies in the real world.
Invert physics on screen rotation, when checked invert the gravity settings when user rotates the device.
The display mode defines how the objects will render in the Simulator. Normal will render each object in its real form. Hybrid is a good way to check the real body shapes (a green, semi-transparent, image will render on top of the regular object). Debug will only shows the real shape form (the original image will not appear).
The Create virtual walls around the screen feature is nice to automatically create walls around the screen. Without them, if a body travels out of the display area, chances are it will be lost in the space.