Recently, I have been totally fascinated by those ferrofluid installations. Ferrofluid means that there is some kind of oil in which very small particles of metal have been dispersed. Thus, this fluid reacts on magnetic influences. This video should make things clear:
In this simple video you see the basic reaction of ferrofluid on magnetism:
However, I have been totally intrigued how the effects of the first video could have been achieved and I found this video that quite nicely shows how things work in that first video:
via Johnny Chung Lee