In a bit of procrastineering research, I started looking into making my own ferrofluid. Apparently the best stuff to use these days is Magnetic Ink Character Recognition (MICR) Toner. But, it's a little hard to find in bulk. The most amazing work I've seen done with ferro-fluid is by Sachiko Kodama:
It's difficult and messy stuff to work with. Not to mention you need to know how to generate custom magnetic fields to move it. So, it's always been a little low on my project list.
Though, in my brief search for materials, I came across this wonderful artwork by flight404. This is done with an application called Processing, which is a programming environment designed for computational art that grew out of the MIT Media Lab. It's definitely evolved quite a bit since the last time I looked at it if you can create these kinds of visuals. It's beautiful and all free (as in open source). =o) Maybe I'll try my hand at it again (in what little free time I have). Simply trying to recreate something that approximates this visual style would be a satifying exercise.