Machine tool simulation is very similar to what you have seen with applications like Vericut. It uses a solid assembly of the machine tool to show the motion of the machine as the NC program runs. It can be set up to simulate the internal toolpath records directly from NX. Or it can be set up to simulate the posted M- and G-codes (the final program that would be sent to the machine). There is an option to show the material removal as the machine simulates, or you can choose to simulate just the machine motion.
Hope that helps,
In the Simulate dialog, Simulation Settings group, there is an option  Show 3D Material Removal.