TUTORIAL AS QUOTED FROM SOURCE
Fluid simulation is, well, fluid simulation. Make a fluid of any viscosity flow around other objects. In this tutorial, I'll show you how to make fluid flowing around multiple
objects for a very cool effect. Here's what it might look like: Fluid Simulation: Blue Goop
Modeling of the Scene
Here's how we will start. First, press “ Z” to make the wire frame view appear. You can now see inside other objects. Press Numpad 1 to switch into front view. Now, Select the cube with RMB (right-mouse button). Press “S” to scale it. Make it about 10 grid spaces wide.
Your 3D cursor (the red and white target) should already be in the center, but if for some reason it's not just click in the center of your cube with LMB. Now, Press Spacebar to bring up the add menu. Select Add>Mesh>Cube. A cube will appear in the center. Now, hit “S” again to scale it to about 6 grid units wide. Hit “S” again to scale, but this time press “Z” after starting to scale. You have just constrained the scaling to the Z axis, and a line should appear going up and down. You can now only scale in this direction; scale until your cube is about 1 grid unit wide.
Now for the next stair. Press “A” to deselect everything. Now, hit “B” to activate box-select. Drag the box over the top four vertices. They will turn yellow, indicating that they are currently active. Now, press “E”, which will extrude this top face. We don't want to extrude up at all, so just press RMB. It appears nothing happened. But really an identical face was created in the same location of the one we extruded from. We can now scale this in with “S”. Make around 4 grid units wide. Now, we can extrude again with “E”. Bring the new face up about 1 grid unit. Repeat this two more times.
Okay! The modeling job is almost done. Press Tab to go out of Edit Mode and switch into Object Mode. Your model should turn pink. Press “G” to move it and bring it to the bottom of the large cube. We will now add our fluid. Press spacebar then Add>Mesh>Icosphere. Just leave the subdivision at two for now. Move it to near the top left-hand corner. Scale it out to a good amount. Then press “S” then “X” to scale it only in one direction to make it slightly oblong.
Now that you've got your scene set up, it's time for the fun part! Select the outer cube, we will use this as our domain. Click on the object button (looks like 3 arrows) at the divider near the bottom. Then, select the physics button (looks like a flaming arrow.) Select the “Fluid Simulation” and follow the settings described in the picture below.
I set the resolution at 25 for rendering because this is only a test. Once you figure out your final positioning, you can render at higher resolutions.
Select the icosphere, (RMB) go into the fluid buttons and set it as a fluid. Change it's initial velocity to 0.10 in the X direction. Lastly, select the stair model and set it as an obstacle. This will cause the fluid to flow around it.
Great! Select the domain again and press the “Bake” button. This will start your simulation. The bar at the top of the screen will tell you how much fluid has already been calculated.
Once you make sure everything is correct, you can set the render resolution higher, I find 100 is a good number. If you have a good computer you might want to try 128. Beware though, this is about 400 MB!
This tutorial is pretty much finished. But remember once you finish baking you can add materials, lights, and render just as you would normally. Fluids are also available to apply subsurf to, making them nice and smooth. (This does take a quite a bit more render time though.) In my final simulation, I added pillars surrounding the stairs, making an interesting effect when the fluid flowed around them. Good Luck!