You know how a char walks off a ledge and then falls...until he hits the floor or dies? That''s what I''m getting at here, do you just increment the players y pos every frame and test for collision every frame also? I hope you understand my question, thanks for any help.

yes thats excatly how people do it. If you are doing too many collisions per frame (thousands) then you might want to employ a technique to reduce the number of tests. gamedev has some good articles on how to do this.

http://www.positech.co.uk