At SIGGRAPH2013  you’ll see a new paper entitled “Position-Based Fluids” that shows an impressive new type of liquid physics simulation, accelerated using NVidia’s PhysX.

Because PBD uses an iterative solver, it can maintain incompressibility more efficiently than traditional SPH fluid solvers. It also has an artificial pressure term which improves particle distribution and creates nice surface tension-like effects (note the filaments in the splashes). Finally, vorticity confinement is used to allow the user to inject energy back to the fluid.

PhysX has a few more details at the link below.

via Introduction to Position Based Fluids | PhysXInfo.com – PhysX News.