while searching for some topic to write about, I found this article on http://www.scientific-computing.com/.

the article is titled And the Oscar goes to…a computer scientist?, which tells us about the computer scientist, Ron Fedkiw, who won an Oscar for special effects in movies, especially simulating the movements of water. He has so far worked on movies such as Terminator 3 (making the liquidy feel of the terminator), Pirates of the Caribbean, and Poseidon.

The surprise is that at the perhaps the peak of advanced movie technology, the special effects are still done using level sets and implicit surfaces, the same ideas we played with in project one when we rendered water bunnies. The reason is that implicit surfaces can easily show change in shape (such as when droplets split in two, or sprinkle when it hits a floor, etc), as well as the fact that we can use it to describe surfaces in the traditional cartesian coordinates of xyz.

But the article also mentions something else they use: the Navier-Stokes equations. Apparently this set of equations model fluids by describing not their positions, but their movement at a certain time, with conservation of momentum in mind rather than mass. Although it has not proven to always have a solution, the Navier-Stokes equations have been used to model turbulances pretty accurately. (car companies use it to design cars apparently)