What techniques are used for the real-time simulation of fluids such as water, for example in videogames?
In particular, I am looking for a project-idea for an (unfortunately rather short) physics project at Uni, so the simpler the better (if there is any such thing as "simple" in fluid-simulations...)
AFAIK the most popular method to simulate fluids in real-time is the SPH method:
It's implemented in Bullet, PhysX, and Fluids:
Fluids v.3 is a large-scale, open source fluid simulator for the CPU and GPU using the smooth particle hydrodynamics method. Fluids is capable of efficiently simulating up to 8 million particles on the GPU (on 1500 MB of ram).
Some other helpful sources: