Sorry, I read this and was meant to respond but forgot
You can simulate fluids in the way you describe but probably not in a real time application, unless you implement a very efficient rendering technique.
Dark Dynamix(and PhysX) does not concern itself too much about how the fluid particles are drawn, there are so many different ways to draw fluids, ranging from very fast but not too realistic looking, to non-real-time but completely realistic fluids, for the latter you would need to be good with shaders.
Dynamix comes with a fluid example which simulates blood sticking to and sliding down a wall.
