Dynamic Paint "effects" system is now back in latest version (r37848 or later) of soc-2011-carrot branch. Paint effects is a special option for paint surfaces that generates animated movement for wet paint.
Now it also works with vertex surfaces and has some improvements too. One of the largest visible update is that you can now use Blender's "force fields" to control dripping direction. So it's no longer limited to negative z-axis only. ;p Color mixing behavior is also improved.
Check out this video of an animated point force dragging paint around: