I would love to see this on a multi-touch display. I wonder if you could make an iphone app like this. Maybe have a little paper boat that floats on the surface which you can't interact with directly but you have to use your fingers to change the flow of the water to shepherd the boat through certain obstacles?
If anybody wants to do this I'll donate my time to make the art :-P
Also ported to Flash:
http://blog.inspirit.ru/?p=248
I've tried it on a multi-touch display, and it is a lot of fun even without any additional things to play with. Pretty heavy on the processor with a lot of people, though.
Not too surprising, considering Oliver works on SquirrelFish ;)
I'm not sure if there is any way to feasibly improve threading of computation in a non-shared-state threading model.