Improve Physics Performance For large Number of Objects

Hi Im in the process of porting over the beginnings of a game I've been developing in XNA but im running into a problem.

In my XNA game I was able to have many thousand bullet objects in my game at one time with little performance issues until I had more objects to collide with [infinite bullets but nothing to collide with should mean no processing time required] however in unity I'm only able to get a few hundred rigid bodys at max before the FPS drops below acceptable levels. Even if they are all set on a physics layer that cant interact with anything [so there should be no performance hit bar the drawing?]

EDIT[Changed to ray-casts and seams to be working well so ignore this section] So is there a "lite" version of the ridged body that will improve performance for a large number of objects or will I have to switch the bullets from ridged body's to a ray-cast script that test from the bullets point back to its previous point each update

Also does unity use any form of spacial partitioning [octtree] to improve performance in large scenes [bullets should not be tested for collision against something that's many miles away]. If not is there a sample round that implements it.

Try decreasing the 'Solver Iteration Count' in your projects physics properties.

Go to Edit -> Project Settings -> Physics

And change the value in there.