   Deformation, cloth and liquid.
  Can you please suggest a book or post a link that deals with these three physics effects? Especially deformation. If the examples could be presented in a no language specific manner better yet. Thank you.   
  Cloth:http://www.matthiasmueller.info/publications/posBasedDyn.pdfDeformation can be done in a zillion ways, but here is one fast way:http://www.alecrivers.com/fastlsm/files/flsm.pdfFluid simulation can be very complex. It all depends on what you want to simulate?Ocean water? Splashing Water? For 2d water, check out this paper:http://www.cemyuksel.com/research/waveparticles/waveparticles.pdf;  The only book on my shelf with those is "Mathematics for 3D Game Programming and Computer Graphics, Second Edition" by Eric Lengyel. (17 pages on Fluid Simulation). It has a c++ sample, but most of it is hardcore math.   