I had some problems with physics collision involving displacements and I found a way to resolve this, google was my friend.
Source

I think it should be stickied\tutorial\Wiki.

History and explanation
In August 2006 valve released a large update to the SDK- bringing it up-to-date with the episode1 features. With the update came a few new bugs; including a notorious bug which resulted in any item of physics falling through displacement surfaces.

From what I understand Episode1 made some changes to displacements via the code, which must have been for optimisation reasons. This bug for instance is NOT present in episode1, as episode1 uses the newly updated codebase.

Which games does it affect?
Some may say "I've never had this bug" well that will be because you're either not modding an affected game or simply that your mod has already updated their codebase to episode1 standards.

the only mods i know for sure that are affected are mods that use SteamAppID 220 or 215- so I think that is "HL2" and "SourceSDK Base" mods.

So to clariy; this bug is occuring because your game code is pre August '06 update... yet your compile tools are new. The two are conflicting.

How do i fix the bug?
There is no official fix yet, however there are a couple of ways to workaround it.

A- Coding. Your custom compiled SDK code must be old (pre the august '06 update), yet you're using the new default compile tools- the solution here would be for you to bring your code up-to-date with the updated code.
B- Map Compiling. The more popular solution is to edit the compile parameters within hammer. Many people seem to get this wrong so i'm going to go through it step-by-step:-

first of all, open up your displacement properties and make sure you've not checked any of the three boxes, in particular the "No Physics Collision" all three boxes should be unchecked- unless you personally need them checked of course. So it should like like this for each and every one of your displacements:
User posted image
now when it comes to compiling you see the "Normal" compile window, click "Expert":
User posted image
now in the expert compile window you need to write an additional command into the "Paramaters:" box. You need to write -novirtualmesh. Once done you click "GO" to compile, DO NOT go back to "Normal" compile; to clarify it should look like this:
User posted image
that's it. now you try it in-game and all should be fixed. If you're still having proplems please double check the above.

The Future
No doubt Valve will fix this at some point, in which case you may need to recompile without the -novirtualmesh option.