Cars have life bars. Hitting a car at speed, but without boosting, will knock some of its life bar off and if that hit knocks the last of its life bar off then it's a take out. Hitting a car right after boosting = instant take out.Ok let me get this straight, you build power by drifting....once your drift gauge is full you have power, which then can be used to take out other cars, burnout style, to destroy environments, or to simply nitrous boost.
If you don't have enough power and try those things you will crash.
Sound about right?
The environmental damage stuff is split into 2 parts - collateral damage and "targets". The collateral damage stuff is things like lamp posts, trees, some walls, pillars that are part of buildings etc. You can knock that stuff down just by driving through it at speed. The targets are specific sections of the track that you can only knock down by boosting into them. If your boost bar is full and a target is coming up, it'll be highlighted up ahead so you can go for it.
There's a video playthrough showing this stuff here: -
http://www.youtube.com/watch?v=GMdPhKU6JnE