Animating fluids like water, smoke, and fire using physics-based simulation is increasingly important in visual effects, in particular in movies, like The Day After Tomorrow , and in computer games. This book provides a practical introduction to fluid simulation for graphics. The focus is on animating fully three-dimensional incompressible flow, from understanding the math and the algorithms to the actual implementation.
Excellent in-depth treatment from a guy who knows his field. Very little of the book discusses LaGrangian (particle-based) methods, but if you're implementing a Eulerian simulation, this is a good place to start. I also wish that Bridson would cover tetrahedral (i.e., unstructured grid) simulations.