After finding the "Falling Sand Game" in college, I was so intrigued by the possibilities in extending the idea that I ended up writing my own version of it - several times. This is the latest version of that simulator, implemented in flash. I'm not much into actionscript programming these days, so I don't plan on adding any more features, but have posted it here for public access. Current features include:
Several particle types with different behaviors including water, ice, steam, fire, torch, moss.
Save/load of worlds using local flash storage.
Drag and drop regions to create multiple reusable clipboard objects.
Heat transfer between particles and with the world - you can boil the ocean, or create a frozen wasteland! Water your plants to make them grow, or set them on fire and watch them burn!
If you think this is cool, you should check out Zandvox - a unity-based, 3 dimensional simulator that is based on the same concept.