I will post a couple of recommendations of fluid dynamics books that I like, although I doubt you would choose them because they focused more on engineering that animation and games, are more classics than very current, and because they are uber pricey. (You may get lucky at a used college bookstore and find a cheap used copy.) But they are very good if you have any desire to understand the nature of fluids and the equations used to simulate them. I personally think it is better to have a good understanding of the physics you are trying to simulate, than just have a loose understanding. Harder to fix problems in the code if you don't understand the physics.

The first one is an excellent book for learning about the nature of fluid flow as it appears in the equations we use to model fluids. It is an undergraduate level CFD book. Highly recommended for those who are good at math and want to understand the physics deeply. I had not realized how pricey these books had gotten. I bought a copy new for US$50 ten years ago. Now it is US$200? Crazy.

http://www.amazon.com/Computational-Fluid-Dynamics-John-Anderson/dp/0070016852/ref=sr_1_1?s=books&ie=UTF8&qid=1367247111&sr=1-1&keywords=computational+fluid+dynamics

The other one is similar, but is more in depth. Graduate school level. This one does get into some semi-modern techniques, such as artificial compressibility (to accelerate solutions for incompressible/elliptic flows), and things like essentially non-oscillatory (ENO) techniques with flux limiters for transonic and supersonic fluids. It is a bit less expensive. Plus, you can rent it for US$40. (WTF? Rent a book from amazon. Crazy.)

http://www.amazon.com/Computational-Mechanics-Transfer-Physical-Processes/dp/1591690374/ref=sr_1_1?s=books&ie=UTF8&qid=1367247513&sr=1-1&keywords=computational+fluid+mechanics

Here is one reason why those books might not be so interesting from the point-of-view of implementing fluids for games. Those books do focus more on the Eulerian approach to fluids, in which you have a fixed volume tracking fluid properties at fixed points or cells within the volume, which is good for designing machines, pipes, airplanes in normal operating conditions...sometimes games. But these days many games solve fluids using the Lagrangian approach, which tracks the motion of individual fluid particles. This enables modeling of, for example, splashes, water collecting into an emergent pool after dynamic changes to the environment, puffs of smoke, etc. More interesting fluid motion for interactive applications and games. For example, the smoothed particle hydrodynamics (SPH) technique implemented in some game physics engines is a Lagrangian fluid solver. But they are very good if you want to understand the nature of fluids and have a deeper understanding of what the terms in the governing equations mean.

http://en.wikipedia.org/wiki/Lagrangian_and_Eulerian_specification_of_the_flow_field

Graham