I'm currently playing around with some soft body algorithms to work out the kinks before trying to integrate them with JBox2d (http://www.jbox2d.org), and it's pretty easy to get some cool effects, so I figured I'd post the earliest example (this one is somewhat Gish-like): http://www.ewjordan.com/processing/VolumeBlob/

Code is linked from there, should be pretty simple to figure out if you'd like to use it.  Runs a little choppy in the browser, though.

That looks really awsome. i remember trying to make something like that and not being able to. So thanks for sharing!

There's a bunch more stuff like this at http://kotsoft.googlepages.com/physicsdemos - not written by me or in Processing, but it's very cool.  I absolutely love the liquid demos - that's the type of things I would love to get working, esp. with JBox2d.  Unfortunately I couldn't figure out how to reach the guy that did those demos, so I'm sort of trying to approximate.  We'll see how far I get...

Hardwire, who's doing the port of Gish to mobile phones, (http://www.gishmobile.com/) gave me some advice as to the basic physical idea behind soft blobs, though he couldn't tell me about how it's actually done in Gish (due to legal agreements, I gather).  Actually, anyone interested in physics should checkout his physics page, at http://physics.hardwire.cz/index.php, it's a very good resource for a lot of stuff.

(Edit: you're right, btw, when I tried that applet in Safari it ran perfectly, it's only crummy in Firefox 3)