A new fluid simulation algorithm that utilizes the same PhysX SDK framework that is used to simulate cloth and deformables is expected to be included in future versions of the toolset.
The above video shows the new algorithm, known as Position Based Fluids, in motion. The algorithm uses the Position Based Dynamics PhysX SDK framework, and is also expected to be made available as part of Nvidia's APEX scalable dynamics framework.
The team at PhysXInfo.com notes that the simulation uses an iterative solver, meaning it can maintain incompressibility more efficiently than traditional smoothed-particle hydrodynamics fluid solvers.
More details can be found on the PhysXInfo blog