I've since found blender, and I've seen examples on youtube of fluid and other simulations... so I think it would be worth looking into to see if you can't use it as well.

http://www.blender.org/

Youtube:
http://www.youtube.com/watch?v=-AiLyQWXjIg

http://www.youtube.com/watch?v=HK4b6pOcnVU

http://www.youtube.com/watch?v=g09Ql7Wtskc

http://www.youtube.com/watch?v=2deRWp-pSko

http://www.youtube.com/watch?v=6FVBjrK4JfE