Sorry, I miscommunicated --- fluid simulation isn't expensive as long as it doesn't affect gameplay. Because then you can do it all on the GPU, and you don't have to transfer it back to the CPU (to perform checks like "is the water touching me?")
In this case, From Dust is simulating the fluids on the CPU, then building geometry / textures on the fly and uploading that to the GPU and rendering. It's quite an impressive tech demo, both from a technical and artistic standpoint.
There's the possibility of shared memory, between CPU and integrated GPU, as John Carmack noted, skipping the transfer. Apparently, the xbox does this already.
Big extrapolation: If intel can pull this off, they may be able to own the next platform, of GPU-based computation. I suggest that's the next platform because it seems to be the only place where many-core code is really happening. And many-core is the only way to get Moore power, since clock rates hit a wall.
Sorry, I miscommunicated --- fluid simulation isn't expensive as long as it doesn't affect gameplay. Because then you can do it all on the GPU, and you don't have to transfer it back to the CPU (to perform checks like "is the water touching me?")
In this case, From Dust is simulating the fluids on the CPU, then building geometry / textures on the fly and uploading that to the GPU and rendering. It's quite an impressive tech demo, both from a technical and artistic standpoint.