It seems like Bullet 2.66 works pretty well for me. Joe said he had tried it and had success as well. I'm going to check in the bullet-2.66 directory I added and update the build so that 2.66 is required. Make sure you build this again with Jam if you're working from the VDrift SVN sources.
Vamos does the car physics, bullet just does collision detection. Bullet can do more complicated physics, but all we're using it for is the collision detection.