First I've heard of this, but it sounds (And looks) awesome!
Official Site with trailer. IGN game page.


this isn?t just a standard corridor-based blast-?em-up. Hydrophobia features a real-time fluid dynamics engine, pitching the player against a new enemy; water. The stuff is everywhere, flooding compartments, blowing out doors, submerging key items and providing a neat way to get rid of enemies. See that room full of bad guys? Chuck a floating grenade into the flooded chamber next door and boom, the wall collapses and they?re under 10,000 gallons of gushing brine.



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