Newsflash newsflash read all about i! Local dimwit makes good in the theatre. There's always another tangent altogether describing blood sweat and tears but it's not for the weak at heart.
A quick look at Blender reveals an incredibly powerful 3d app. First let's look at a couple of examples of what's possible using the physics engine that comes with blender.
I should quickly mention at this point that Blender is an open source 3D application available for free download at http://www.blender.org
Magic Fluid Control was posted on youtube by a user named bugman2000 . It is the work of N. Thuerey, R. Keiser, M. Pauly & U. Ruede. The official webpage documenting the work can be found here!
Wow! Not Bad!
Make sure you take advantage of the youtube built in menu (by clicking on the menu button) and browse some of the other videos showcasing fluid effects done in Blender. I really liked the 7th option "superfluid".
Note : the other menu options might not become available until after you've started playing the first video.
If you want to find out about creating fluid within Blender, there's some really great tutorials out there. And of course a good place to start might be here at the www.blender.org wiki "fluid tutorials 1 & 2"