As most of you know, I was accepted to work on improving Dynamic Paint this summer as a Google Summer of Code student. The coding period began two weeks ago and now I finally have something to demo.
The biggest goal of my GSoC project is allowing vertex and Ptex level painting. Those formats will use Blender's point cache as storage thus allowing such cool things like real-time viewport preview of canvas and no need for UV mapping or to actually care for file locations etc.
Here is a screencap demoing vertex level displacement painting + real-time viewport preview:
It's still heavily work in progress so it will take at least a week before I'll commit these changes to my GSoC branch (soc-2011-carrot). Also, the final Ptex support is pending until Nicholas Bishop (or someone else) finishes the basic Ptex implementation for Blender. :s