In my opinion, one of the most remarkable features in Blender is its integrated fluid simulator. This thing is just really cool and a ton of fun to play with, to boot.
Before running head-long into fluid simulation-land, however, you should know a few things that are different about the fluid simulator. Like most of the other physics simulation controls, the main controls for the fluid simulator are in Physics Properties. However, unlike particle, cloth, and soft body simulations, which can technically work in an infinite amount of space, the fluid simulator requires a domain, or world, for the simulation to take place.
Another difference is that the fluid simulator actually creates a separate mesh for each and every frame of animation that it simulates. Because of the detail involved in a fluid, these meshes can get to be quite large and take up a lot of memory. To account for that size, the fluid simulator actually saves these meshes to your hard drive in .bobj.gz files. The other simulation systems also save data to your hard drive, but because fluid simulation data can take up an enormous amount of hard drive space, you need to tell Blender where to save these files. Because these files can get pretty large, it's a good idea to confirm that you have plenty of hard drive space available for storing your simulation.
The fluid simulator has all ...