When working on a cheesy little demo with John Ratcliff called "ageia carwash" I decided to try an idea that was bouncing around my head which was to render the particles as sprite that looked like the normals of a sphere, blur it a bit, then discard the post-blurred alpha below a particular threshold, apply some lighting and fake refraction in an attempt to create a GPU friendly real-time liquid surface. Personally I thought this first attempt was pretty good, but I couldn't convince everyone higher up the food chain that it was a reasonable compromise, but I was just a kid bad then and didn't push for the idea hard enough I guess :/
Luckily Simon Green independently had the same idea at NVIDIA and has over time turned it into the goto method for rendering particle based liquids in real-time.
Also around this time Matthias Müller, Simon Schirm and Stephan Duthaler had another novel technique called Screen Space Meshes (published in 2007, but I think they had this working much earlier than that), which did marching squares in 2D and then projected that back out into 3D. It was fast enough for real-time and could be run efficiently on our own hardware so thats the direction we went for a while, even ended up in a few games I think. But of course, eventually we ended up back at Simon's solution by the time acquisition came around.
Anyways, this video was captured early in 2005 before we even added lighting in the demo and even featured our old logo.
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