We initially intended to achieve this using Metaballs but then changed our minds and went with Blender’s fluid simulation instead.
He reason for this was the quality and realism of the FX. Our initial scepticism was based on the sometimes fiddly and random nature of the fluid simulator when we’ve used it before (We used it for the liquid pouring from the Rurf bottle in To Shoot A Rurf, but used metaballs for blood, the ‘mirror snake’ and a plane multi-subdivided and with a wave modifier for the river in the ear canal sequence)
Here are some early tests.
The first shows some gloopy vomit (the render is ultra-lo resolution) lit using approximate ambient occlusion and a single lamp.
The second shows a quick and dirty test (using open GI renderer - taht's why it looks crappy) of Mr. Humpfninkel getting sick. I know the image is small and very lo-res, but you should be able to make out that the vomit follows the movement of his head and his body deflects the flow of the vomit also.
All this talk of vomit is making me queasy!
More images and updates to follow soon.
By the way, Blogger doesn't seem to like Animated gif's so instead I use http://tinypic.com
to host them and link them to Blogger so that they display correctly on the site.