Take your pants off and watch this video from Lagoa Technologies Inc. where they demonstrate their physics simulations.
HHHNNNGGGG..
Have a look at Lagoa's new "multiphysics" demo video. The thing I like about this tech versus other technology demo's from the past (read: PhysX) is the relationship between each particle. Rather than each particle having properties contained to themselves, they seem to be able to control whether they connect/relate to one another as they touch. The result, as an example, is some wet crashing sand.
[vimeo clip_id="13457383" height="" width="640"]
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what?? a ghost was in the room, this is its ectoplasm on me...what???
Inflated bodies.. layered cloth.. mmmm.
Real time interactive smoke
No way all of this is, especially the really dense stuff..
There's stuff you can do real time with ice, but it depends on the # of points, sub-steps and accuracy. At around 1:50 till the end it shows a lot of real time and interactive stuff.
Need new pants too !
I believe its accomplished with custom ICE nodes and rendered with Arnold.