Miika Hämäläinen has been developing a very interesting system to achieve a higher level of simulation realism. By allowing either meshes or simulations to affect textures' value of nearby meshes, ie. to paint on them. And he just said he finished it!
From his blogpost:
I just finished coding "paint effects" system. Now it finally works over UV-seams well enough. Here is a short animation demonstrating spread effect on a 3D surface: Mancandy Freeze.
In that video, paint output is simply being used as a stencil mask for ice textures.
I'm also thinking about renaming this system to "Dynamic Paint", because now you don't only paint with mesh but with particles and other stuff as well
Here are some of his supercool videos.